Energy efficiency for businesses: not an option
While members of the European Parliament and Denmark, holder of the EU presidency, strongly back the Energy Efficiency Directive and the idea of environmentally sustainable growth, crisis-struck Hungarian businesses may find hard to invest in such developments and survive at the same time.
Through various projects of the new Hungarian development plan, the Új Széchenyi Terv, hundreds of billions of forints are available from the Hungarian government, the European Union’s Cohesion Fund, the Regional Development Fund and the European Social Fund for tenders under the so-called Green Economy Development Program. By end of May 2012, more than HUF 100 billion in funding requests had been received by the Hungarian development agency, the Nemzeti Fejlesztési Ügynökség (NFÜ). Although more than HUF 30 billion is already granted, the tenders are mostly open only to municipalities, local governments, and micro regions or newly built renewable power plants.
Hungarian businesses recognize the importance of increasing energy efficiency and/or the use of cheap renewable energies in these challenging times. Under a tender which specifically aimed to increase the use of renewable energy, 126 applications were made for HUF 6.7 billion of funding, although to date only 37 have been accepted, with a total HUF 897 million of backing released. (Conversely, a tender that aims to help install solar panels on residential and individual buildings had to be prolonged, due to a lack of interest and additional funding.)
Small- and medium-sized enterprises may find it even harder to source financial or technical assistance to help them lower energy consumption and raise environmental awareness. The Virtual Power Plant Program, started last March, aims to collect, organize and publish the energy efficiency achievements of Hungarian businesses. Based on international experiences, the program will provide some basic data to users about the annual rate of savings, the type, cost and payback period of investments and the main occupation of participants.
The Virtual Power Plant Program serves several purposes. First, the data uploaded forms a knowledge base, sharing ideas and experiences of how to rationalize energy consumption. On the other hand, the program will help to quantify and summarize energy savings already achieved, so state institutions will find useful information about the energy consumption and saving patterns of companies. The analysis of data provided by the program could also be used in energy system and network modernization. The potential development of energy efficiency for Hungarian businesses is said to be one-third of all Hungarian energy savings.
To emphasize the improvement in energy efficiency, a program was announced for “energy-conscious companies”. Under the program, available from last March, public experts help to determine the steps needed in the development of energy management. Consultants present management training courses, outline special assessment opportunities and also promote energy efficiency credit programs and special tenders.
After a year, the consultants review the goals achieved and successful businesses are entitled to use the Energy Conscious Company title and the scheme logo. Further one-year commitments to the project can also be made.
One of this year’s winner of the title was CSO Gumifeldolgozó Kft, which has produced flexible rubber pavements from recycled granules since 1991, which are used mainly in playgrounds and sports courts.
The company has huge power demands, so energy efficiency was crucial to achieving higher profit margins. The company made a commitment to reduce energy consumption by 20% by the end of the year through long term production-process planning, and careful maintenance. Also, replacement parts are selected not just based on price but also on energy efficiency measures.
In the longer-term, the company plans to fulfill its energy demands through its own high-efficiency and environmental friendly power plant fueled with waste. While the HUF 200 million investment might sound a little reckless given the harsh economic situation, the power plant would significantly reduce overall energy bills and also the long-term hindrance of ever growing energy prices.
The mentor (and role model) of the Energy Conscious Companies is Audi Hungária Motor Kft, the car and engine manufacturing plant of Audi AG in Győr, which has paid special attention to sustainability as a value-added factor since its founding. To manage sustainability issues, the company created an environmentally-focused management system in 1999. It was the first such in Hungary to be registered under the European Union’s strict Eco Management and Audit Scheme (EMAS) regulations. From 2011, energy management was integrated into an environmental-focused management system and certified by the international ISO 50001 standard.
The factory uses many methods to analyze the potential the environmental aspects of different activities. The so-called energy workshop system aims to explore the energy-consuming characteristics of the production processes and identifies areas where energy efficiency can be improved.
In addition to the optimization of processes, environmental awareness is also important on the level of technologies used, to make sure that environmental impact is as low as possible. Among many other things, the company testes engines to lower air pollutant and waste emissions, and minimizes lubrication throughout the mechanical working phases to reduce hazardous waste. The company focuses on environmentally friendly solutions in production and in office operations too. As a result of careful planning, it says 98% of waste is recycled. The company also pays attention to reducing energy and water consumption throughout the whole production process.
Payments must be accelerated
Payments for EU-backed projects must be accelerated, said Zoltán Petykó, Chairman of the NFÜ at a press conference in May.
In the period 2012-2015, about HUF 1,200-1,500 billion a year should be paid out to tender winners, Petykó said. The closing of projects is also a problem, in that many developers still haven’t submitted bills worth some HUF 700 billion to the development agency.
Amongst delayed projects, those of municipalities represent a significant portion, as they have been struggling with a lack of funds since 2008. Many municipalities have no experience in project management, which is essential throughout the process when using EU-backed funds, Petykó added.
Talking about the results so far accomplished, Petykó said, that in the 2007-2013 EU budget period, HUF 8.2 trillion was available for Hungary based on the current exchange rates, of which HUF 5.3 trillion is already committed in contracts. The total amount of payments had reached HUF 2.5 trillion.
The leadership of the development agency has recommended significant changes to the tendering system to speed up disbursement and to manage the jammed processing of tenders, Petykó said.
EU backs eco-innovation projects
The European Commission announced a €34.8 million call for eco-innovation projects in May. Businesses and entrepreneurs from across Europe can apply for funding to help bring novel environmental projects to the market, the EC press service announced.
The call is open for eco-innovative products, techniques, services and processes that aim to prevent or reduce environmental impacts, or which contribute to the optimal use of resources. This year's call has five main priority areas: materials recycling, water, sustainable building products, green business and the food and drink sector.
The call is targeted particularly at SMEs that have developed an innovative green product, process or service, but which are struggling to find a place in the market. The tender, open until September 6, 2012, offers co-funding to cover up to 50% of the project costs, and is likely to support around 50 new projects this year.
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