investing | green stocks report
eu Pushes for more energy efficiency
The 2020 initiative may require regulation upgrades.
by RONA FRIED, PH.D.
rona Fried, Ph.D., is
president of sustainable
business.com, the online
community for green
business: daily green
business and investor
news, green jobs and
green investing newsletter, The Green Investor.
contact Fried at rona@
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In 2008, the European Union (EU) launched an ambi- tious 20-20-20 plan for 2020, which would increase renewable energy to 20 percent of the mix, reduce
greenhouse gas emissions 20 percent below 1990 levels and
increase energy-efficiency 20 percent compared to business-as-usual projections.
The EU is on track to achieve the first two goals, but
although energy-efficiency is usually touted as the least-expensive, most easily-achieved of the three goals, so far it’s
turning out to be the laggard.
One reason is that the first two targets are legally binding, but the energy-efficiency goal is not.
EU member countries are on track to increase energy-efficiency only 10 percent by 2020, which prompted the
Commission to intervene with a plan to raise it another 10
percent. They noted that legally binding measures may be
necessary, but they are not starting with that.
The new energy-efficiency plan focuses on the three
main sources of energy consumption:
1. Buildings — create incentives to trigger the renovation process in public and private
buildings, while improving the energy performance of components and
appliances used in them.
2. Transportation — a forthcoming “White Paper on Transport”
will cover advanced traffic-manage-ment systems, infrastructure investment, smart pricing and vehicle-efficiency standards.
3. Industry — offer incentives for increasing energy
management (such as tax rebates, energy-efficiency financing and funding for energy audits) for small and medium-sized businesses; institute mandatory regular energy audits
for large corporations; and establish energy-efficiency
requirements for industrial equipment and HVAC.
Public authorities will be required to renovate at least 3
percent (by floor area) of their buildings each year, double
the current rate. The Commission’s new Energy Efficiency
Plan states that retrofits must “bring the building up to the
level of the best 10 percent of the national building stock.”
And, “when public bodies rent or buy existing buildings,
these should always be in the best available energy performance class.” ( tinyurl.com/EUnewplan.)
While these are aggressive recommendations, public
buildings represent only 12 percent of the EU’s building
stock. They have yet to address the rest of the market.
efficiency services provider, which generated 38 percent of
its sales ($13 billion) in fiscal year 2010.
Ameresco Inc. (AMRC) only has a nascent presence
in Europe, and this would provide a significant opportunity for expansion. The company is the leading provider
of energy-efficiency and renewable energy services in the
EnerNOC Inc. (ENOC), known for its demand-response
and energy management solutions, has entered the U.K. as a
first step toward EU-wide expansion. Other smart-grid leaders would also benefit, such as Itron Inc. (ITRI), Echelon
Corp. (ELON) and Telvent GIT, S.A. (TLVT).
Long-time sustainability pioneer Interface Inc.
(IFSIA), which makes broadloom carpet, already generates 28 percent of its sales in Europe. As more buildings
are renovated, there will be increased demand for green
products such as carpets.
ICF International Inc. (ICFI) is at the forefront of
issues like energy-efficiency and climate change consulting in the United States. This would provide a significant
growth opportunity, as it currently
gets less than 10 percent of its revenue from Europe.
only measure the emissions
which Public companies benefit?
A number of green stocks stand to benefit from the EU’s
emphasis on energy-efficiency.
Johnson Controls Inc. (JCI) is the world’s largest energy-
20 July/August 2011 SOLAR TODAY solartoday.org
Copyright © 2011 by the American Solar Energy Society Inc. All rights reserved.