The European Court of Auditors assessed whether Cohesion Policy investments in energy efficiency were cost-effective. ECA drew the conclusion that the projects selected by Member State authorities for financing did not have rational objectives in terms of cost-effectiveness, i.e. cost per unit of energy saved.

This special report (SR 21/2012) entitled “Cost-effectiveness of Cohesion Policy Investments in Energy Efficiency” and published by the European Court of Auditors showed that the projects selected by Member State authorities for financing did not have rational objectives in terms of cost-effectiveness, i.e. cost per unit of energy saved. Their objectives were to save energy and improve comfort, but they were not selected for financing on the basis of their potential to produce financial benefits through energy savings, but rather that the buildings were typically regarded as being ‘ready’ for funding if they were in need of refurbishment and their documentation complied with the requirements. In March 2011, Commission proposed specific measures to close the energy efficiency gap and reach saving target.

The audit, which was carried out in the Czech Republic, Italy and Lithuania – the countries that had received the largest contributions from the Cohesion Fund and European Regional Development Fund for energy efficiency measures for the 2007-2013 programming period and had also allocated the highest amounts to projects by 2009, showed that the cost-effectiveness concept, or the best relationship between resources employed and results achieved, was not a determining factor when Member States allocated funding to energy efficiency measures and concrete projects. Neither was this concept part of the Commission’s assessment prior to approval of the operational programmes.

Moreover, the planned payback period for the investments was 50 years on average, and up to 150 years in certain cases. According to ECA, this means that these funds were not spent in a sensible way because the lifetime of the refurbished components or buildings is lower and can, to a large extent, be considered to be lost on the energy efficiency point of view. ECA therefore recommends that the Commission make the Cohesion Policy funding for energy efficiency measures subject to a proper needs assessment, regular monitoring and the use of comparable performance indicators as well as the use of transparent project selection criteria and standard investment costs per unit of energy to be saved, with a maximum acceptable simple payback period.