EU energy savings grants used wastefully: Auditors

BRUSSELS (REUTERS) - EU funds to spur energy saving have gone to waste, with some projects so inefficient that it would take longer than the lifetime of an improved building to recover the costs, a European Court of Auditors report said on Monday.

The Court of Auditors, which is responsible for checking the finances of EU institutions, said payback time for projects averaged half a century.

Energy savings were debated fiercely for much of 2012, when the European Union agreed on a new law to improve the bloc's record on using less energy through measures such as better building insulation. The aim is to cut bills, reduce carbon emissions and curb dependence on fossil fuel imports.

Without the 2012 law, the European Union was expected to meet only about half of its goal to cut energy use by 20 per cent, compared with projected levels, by 2020.

EU funding for efficiency was about 5 billion euros (S$8 billion) for the budgeting period 2007-2013, and the Commission has proposed a rise to more than 17 billion euros for 2014-2020.

The Court of Auditors examined the use of cohesion funds - EU grants intended to bring member states closer together by narrowing the gap between rich and poor - designed to try to improve efficiency.

It looked particularly at spending in the Czech Republic, Italy and Lithuania, which received the biggest contributions.

"The audited energy efficiency projects in public buildings were not cost-effective," the report said.

"The average planned payback period for the investments was around 50 years, which is far too long considering the lifetime of the refurbished components and even of the buildings themselves."

It added that in some cases, costs would only be recouped after more than a century.

The auditors urged the European Commission to implement stricter criteria before agreeing to projects and to set maximum acceptable payback periods.

In response, the Commission said the audited programmes were negotiated before the Commission fully developed its energy-efficiency policy.

"The new Energy Efficiency Directive will require member states to promote the availability of high quality and cost-effective energy audits and energy management systems to all final customers."

Campaigners agreed the new law should help but said there was no room for complacency.

"This is a helpful reminder to do better during the new funding period 2014-2020," Stefan Scheuer, secretary general of the Coalition for Energy Savings, said.

The European Union's financing for 2014-2020 has yet to be agreed. A budget summit of leaders of EU member states is expected next month following failed talks in November.

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