Energy service and banks
Banks are one of the biggest sources of funds for promotion of energy efficiency programs. A substantial part of the activities in this direction can be carried out by energy service contracts - the potential of this market is at least 500 billion roubles a year. According to the Russian Social Ecological Union, the key condition for achieving the Government's objectives for energy efficiency is cooperation between the state, the public, businesses and banks.
According to Sberbank experts, about 3.5 trillion roubles will be invested by 2015 in energy efficiency, including energy service contracts. Experts say that attention to energy efficiency by banks is growing slowly but steadily. Sberbank and Schneider Electric have signed Memorandum of Understanding on implementation of projects in this area. Jean-Louis Stasi, the President of Schneider Electric in Russia, says: “In Russia, the energy services market is still in its formative stage, but it has great potential."
Energy service contracts help companies to implement energy saving measures, on own account or with the assistance of third-party sources. Organization receives the payment in instalments of the money saved by the client when paying for electricity. Theoretically, such projects are of interest for any business where there are recipients of energy. Energy experts say that such contracts help to reduce payments for energy by up to 30 %, provide access to external financial sources, improve quality of production processes, reduce costs for repairing equipment and allow savings to be spent on development. Energy-intensive businesses can undertake activities to improve energy efficiency of production at the expense of the energy service company, without overloading their balance with debts, while they still have the means to implement investment programmes to upgrade the main equipment.
Despite the visual appeal, there are many difficulties which, according to experts, are associated with vague legislation, underdeveloped energy efficiency control mechanisms and the lack of state policy in the field of energy saving. The key point is circumspection of Russian banks, most of which are scared by such a long payback time period - more than 2 years. Many banks rank energy service projects as highly risky. In the countries where this sector has been for long and actively developed, there are flexible financing schemes, while such prospects is the matter of the future in our country. Banks have little understanding of the mechanisms within which this sphere works. As a result, banks overrate and overprice the risks of energy service projects, which leads to higher rates on loans and longer payback time period, or to the abandonment of the project.
In practice, the contracts, as a rule, are implemented not within two to three years, but within about five years. At the same time the company experiences difficulties to legally register energy service allowance in the tariff.
According to expert opinions, Russia is just at the start, and the European experience shows that Russia will have several years of market development of energy services, provided the sufficient activity of this market. In addition, the energy sector shall clarify to banks the mechanisms and instruments for this segment of the market, and the state shall give more state guarantees to interests of market participants, to relieve all stakeholders from possible risks.