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Energy Efficiency

Investor Confidence Project

Top 2 benefits explained for energy efficiency project developers that decide to apply the ICP framework

Posted on November 14, 2017 - ( views)

by Sara Ibrahim

ICP (Investor Confidence Project Europe) delivers a standardised framework for developing energy efficiency projects to reduce uncertainty for clients and investors – to help grow the number of projects and the energy efficiency finance market. 

A framework already exists for buildings and new schemes are now being developed for projects in industry, district energy and street lighting.

The first new framework will be on industry (launch December 2017). And we are already looking for project developers to apply this framework in pilot projects. As a project developer, you will ask the question “what's in it for me” and here you will find the answers.

Top 2 benefits why project developers should apply the ICP framework:

1: Get more clients  

A key barrier for industrial clients to start a new energy efficiency project lies in the uncertainty about the outcome, the difference between the “promises” and the “real savings” generated. 

This is where the ICP framework comes into play. It is a technology neutral and certifiable process description ensuring that best practices are applied throughout the development of the project. The framework has been developed together with the financial community to help lenders and investors have greater confidence in project outcomes, which basically means an ICP project is more likely to deliver against its promises. 

Increased confidence obviously works both ways, it benefits your clients as they can trust that they get what is promised.  

For a project developer, applying the ICP framework becomes a sales argument: “We will deliver against our promise. You can trust us as we are applying the ICP framework which has been developed by the industry and recognized by financial institutions.”  

2: Free marketing support 

The ICP project in Europe is co-financed by the European Commission (again, think about trust!) and EEIP, the largest global industry network for energy efficiency is a partner. Part of EEIP´s contribution is to promote those project developers applying the ICP framework. 

As well as the entire energy intensive industry in Europe, EEIP covers the industrial value chain from end to end, which means EEIP is reaching out to all your current and potential clients.  

EEIP will tell them that you are a professional project developer using highest standards to deliver against your promises. 

And EEIP will also recommend any potential client to “request” project developers to apply the ICP standards.  

The reason to believe  

The underlying objective of the Investor Confidence Project Europe is to help unlock access to financing for the building, industry, district energy and street lighting markets by standardising how energy efficiency projects are developed, documented and measured. Standardization using best practices set out by ICP reduces the risk for investors in regard to the projected outcome of an energy efficiency project. It also reduces time and skills needed by investors to perform due diligence for each individual project. Finally, it reduces transaction costs. These factors open the door for more capital to finance such projects or re-finance investments of project developers and ESCOs.

A side benefit of such a standard is logically that it increases also the certainty for clients of energy efficiency projects that projected energy savings will be delivered.  

The origin  

The logic behind the ICP approach links back to the outcome of an initiative called Energy Efficiency Financial Institutions Group (EEFIG), established in 2013 by the European Commission Directorate-General for Energy (DG Energy) and United Nations Environment Program Finance Initiative (UNEP FI). EEFIG created an open dialogue and work platform for public and private financial institutions, industry representatives and sector experts to identify the barriers to the long-term financing for energy efficiency and proposed policy and market solutions to them. EEFIG has engaged 120 active participants from 100 organizations to deliver clear and unambiguous messages. EEFIG recommended adopting the ICP in Europe and it was introduced in 2015 with the support of Horizon 2020 funding.   

The ICP structure

ICP uses an approach originally developed in the US for the buildings sector. In Europe, it was first adopted for buildings through a project financed by the EC. Now ICP is tackling industry, district energy and street lighting. 

ICP is based on two foundations:

1. The ICP framework 

The ICP framework assembles best practices and existing technical standards into a set of Protocols that define a clear roadmap for developing projects, determining savings estimates, and documenting and verifying results.

2. Independent 3rd party certification 

ICP's Investor Ready Energy Efficiency™ (IREE™) is an international certification that insures best practices, the right professionals and third-party validation are used to deliver high-quality projects that you can bank on. 

What´s happening right now – and how project developers can engage 

Right now, ICP Protocols are being developed for industry and they should be available by the end of the 2017. The protocols for district energy and street lighting will be available early 2018.  

How the development of protocols is organised – and how you can participate
Engaging in the development of protocols (the ICP framework) is easy and allows project developers to shape the final product across Europe.  

The ICP technical team together with internationally recognised experts are developing a draft which will then be shared with the Technical Forum which acts as the leading technical advisory group to input, discuss and feedback. This process is organised in an iterative way. The Technical Forum is open to all interested experts and the whole process is open source.  

Summary and call to action  

Applying the ICP framework for energy efficiency projects gives you a competitive advantage in the market, more business, better re-financing opportunities and – as part of the ICP EU co-funded project – free marketing support in all European countries and free technical assistance to adopt the ICP system.

By Juergen Ritzek, Co-founder and Business Director of EEIP


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