Energy Efficiency in Europe

Opportunities for Australian Companies in the European Market

Page 1

Jargon Buster (Acronyms)

ASEFAVE BIPV BTI CEN CENELEC CHP CTM DECC DGNB EBR EC EMEA EPBD EPC EPO ESCO ETS ETSI EU GDP GPRS HVAC ICT IEA IUCAB LEED NEEAP OHIM PRIME PV RCD TARIC UCD UTEE UK VC WIPO Spanish Association of Manufacturers of Windows and Curtain Walling Building Integrated Photovoltaic Binding Tariff Information European Committee for Standardisation European Committee for Electro-technical Standardisation Combined Heat and Power Community Trademark Department of Energy and Climate Change German Sustainable Building Council European Business Register European Commission Europe, Middle East and Africa Directive for the Energy Performance of Buildings European Patent Convention European Patent Office Energy Service Company Emission Trading System European Telecommunications Standards Institute European Union Gross Domestic Product General Packet Radio Service Heating, Ventilation and Air Conditioning Information and Communication Technology International Energy Agency International United Commercial Agents and Brokers Association Leadership in Energy and Environmental Design National Energy Efficiency Action Plan Office of Harmonization in the Internal Market Powerline-Related Intelligent Metering Evolution Photovoltaics Registered Community Design Integrated Tariff of the Community Unregistered Community Design Energy Efficiency Technical Unit United Kingdom Venture Capital World Intellectual Property Organisation

Page 2

Page 3

Table of Contents
Section 1 01. 02. Section 2 01. 02. 03. 04. 05. 06. Section 3 01. 02. 03. 04. Section 4 01. Introduction Drivers of Energy Efficiency in Europe Locating and Accessing the Opportunity Key EU Legislation Driving the Energy Efficiency Sector Energy Efficiency Plan (2011 and 2006 Action Plan) Directive on Energy End-use Efficiency and Energy Services (2005) Revised Energy Performance Directive for Buildings (2002 & 2010) Eco Design Directive (2005 & 2010) EU Emission Trading Scheme (2003 & 2009) Member States Initiatives Energy Usage in Europe Energy Consumption Energy Prices Energy Intensity Energy Efficiency Progress Sector Opportunities in Energy Efficiency Green Building Products and Materials a. Heating, Ventilation and Air Conditioning (HVAC) b. Building Automation Systems c. Heating Devices (Heat Pumps) d. Photovoltaic (PV) for the Built Environment e. Energy Efficient Lighting Energy Service Companies (ESCOs) and Green IT a. Energy Service Companies b. Green IT Smart Grids & Smart Metering Before Entering the Market Intellectual Property Rights Patents Trademarks Design Protection Copyright Pathways into the European Market Identifying your Unique Selling Proposition Indirect Exporting and Direct Market Entry Licensing, Joint Ventures and other Cooperative Strategies Legal Requirements when Contracting an Agent or Distributor Choosing the Right Marketing Model Finding an Agent or Distributor Commercialisation and Venture Capital in Europe Collaboration as a Pathway to Market 6 6 7 9 9 10 10 11 12 13 15 15 17 18 19 20 20 20 21 21 21 22 22 22 23 24 27 27 27 28 28 29 30 30 30 31 31 32 32 34 34

02.

03. Section 5 01. 02. 03. 04. 05. Section 6 01. 02. 03. 04. 05. 06. Section 7 01.

Page 4

02. 03. 04. Section 8 01. 02. 03. 04. 05. Section 9 01. 02. 03.

Corporate Venture Capital Funds Private Equity and Venture Capital in Europe European Government Research and Commercialisation Support Standards and Regulatory Compliance in Europe Standards Organisations CE Marking and Product Certification Product Liability Product Safety Import Regulation Spotlight on Key European Markets for Energy Efficiency Czech Republic France Q&A with Veolia Environment Germany Q&A with BOLLES+WILSON Q&A with Drees & Sommer GmbH Italy Q&A with Bovis Lend Lease Spain (Portugal) Q&A with the Comisin Nacional de Energa Sweden United Kingdom (UK)

34 36 37 38 38 38 39 39 39 40 40 43 46 47 51 53 55 58 60 62 63 65 67

04. 05. 06. 07. Appendices 01. 02. 03. 04. 05.

Key European Government Agencies for Energy Efficiency European Energy Efficiency Companies Trade Shows and Conferences Trade and Advocacy Associations References

67 70 75 78 79 80

Disclaimer & Copyright Notice

Page 5

Section 1

Introduction

The European Unions (EU's) 27 member states had a total population of 501 million people and a combined economy worth USD16.3 trillion (AUD15.41 trillion) in 2010 (around 13 times the size of Australia's economy). The European Union (EU) has a combined GDP greater than the United States and includes four of the world's ten largest economies (Germany, France, the UK, and Italy). The 27 members of the EU bloc constitute one of Australia's largest trading and investment partners. Total two-way trade with the EU was valued at AUD78.0 billion in 2010, representing 14.1 percent of Australia's total trade. Europe is seeking to move to a low-carbon economy in order to fight climate change, ensure its energy security and to create economic growth/jobs through corresponding innovation in the renewable energy sector. The EU climate change goals are the driving force behind many pieces of EU legislation. The EU Climate Change Package (20-20-20 by 2020) - The EU is committed to: Cutting Greenhouse Gas production by 20 percent Increasing Renewable Energy use to 20 percent of the overall EU energy needs and Cutting energy use by 20 percent compared to projected 2020 EU energy use.

With rising energy prices the Energy Efficiency target of 20 percent is also necessary to ensure Europes long term competitiveness. EU Climate Policy is increasing its focus on the potential gains from Energy Efficiency and this is driving demand in the EU market for energy saving technology. Energy efficiency is a horizontal sector that affects nearly all of the EU's most important policy and economic areas, including transport, energy, building, agriculture and information technology. Currently the key energy efficiency focus in Europe is on the Built Environment which is responsible for an estimated 40 percent of total energy usage. The EU and its member states see a clear role for Energy Service Companies and similar markets based solutions, and are implementing measures to spread their growth and influence. Smart Grids, with a focus on consumer demand management, are spreading rapidly throughout Europe. Early movers like Italy and Sweden have installed smart meters, whereas as countries like Spain, France and the UK are presently rolling out comprehensive smart meter systems.

01.

Drivers of Energy Efficiency in Europe

Sections 2 and 3 of this report summarise the government and economic drivers of energy efficiency in Europe. Government regulation and the savings generated by energy efficiency investment are two main drivers for the adoption of energy efficiency measures in Europe these are legislative drivers such as mandatory targets and commercials drivers such as return on investment. Generally the energy efficiency market in Europe is driven more by legislation than market based initiatives. Organisations like the Green Building Council and the Energy Efficiency Council have comparatively less influence than similar organisations in the Australian market. Within Europe the Northern European markets are generally more advanced and are early adopters of energy efficiency products, services and legislation. The German market is the largest, most developed and most competitive marketplace for many of the energy efficient sub-sectors reviewed. The German Trade and Investment industry estimate the German market value at EUR67 billion (AUD93.1 billion), making it more than 10 percent of the worlds market for energy efficiency. Through legislation and incentive programs the EU is driving energy efficiency on a much wider scale. Recently there has been some scepticism as to whether the EU had introduced enough incentives to meet the outlined

Page 6

targets. However through a range of new legislation, the EU is creating a second wave of implementation with measures including obligating EU member state government administrations to reduce energy use by; Renovating 3 percent of their building floor area annually, and Legislating that energy retailers and energy distributors must achieve energy savings annually equal to 1.5 percent of sales volumes through improving consumers energy efficiency.

Forcing energy retailers and distributors to achieve annual energy savings of 1.5 percent of sales volumes through consumers energy efficiency could rebalance the European market for energy efficiency companies.

An additional important driver for the EU Energy Efficiency market is the return on investment in energy efficient products for consumers (attractive to both consumers and the product providers). The northern European markets have long had incentives to adopt energy efficient measures due to their relatively high energy usage as a result of the cooler climate and large paybacks on energy saving building products. Italy has the highest energy prices in Europe and Spain is the only country in Europe which has not achieved any energy savings over the past decade and the current economic slowdown is driving a search for savings across the economy.

02.

Locating and Accessing the Opportunity

This report aims to match the Australian industry capabilities in energy efficiency to the opportunities in the European markets. Consequently this report will focus on the following key areas: 1. Green building products and materials, including the following: Heating, Ventilation and Air Conditioning (Specifically Design, Control Systems and Sensors) Heating Devices (including heat pumps and Solar-thermal) PV for the built environment Energy efficient lighting

2. Energy efficiency consulting services, including energy performance assessment technology or services 3. Smart Grid and smart metering solutions, particularly focused on demand side management. In a marketplace the size of Europe identifying the market(s) with the greatest potential is often difficult. While there are opportunities in virtually all markets Austrade, through their network in Europe has identified priority markets for Australian companies in the niches of Green Building, ESCO and Green IT services and Smart Grids (listed above). These markets have been based on a number of factors including their size, existing or expected growth and the accessibility of the opportunity. These market selections are intended as a general guide and Australian companies will need to review this individually based on their specific circumstances. Sections 4 and 9 provide information on the sectors and markets that provide the greatest opportunities. These are summarised in the following table:

Page 7

Opportunities by Sector and Market Green Building HVAC Renewable Heating PV Lighting ESCO and Green IT Smart Grids France, Germany and Spain Austria, Germany and Sweden Germany, Italy and Spain Germany, France and Spain Czech Republic, Germany, Spain and the UK France, Portugal, Spain (establishing) and Sweden (established)

The size and complexity of the European markets can make them appear challenging to enter. Given the cultural differences across Europe and the sheer size of the market local representatives with their market knowledge and contacts are nearly always essential. For example it cannot be expected that a German representative will be of much assistance developing the Spanish market. Often an Australian company will spread their resources too thinly to attempt to gain traction in multiple markets simultaneously. Focus, follow-up and persistence are key to winning business in Europe. There are also a number of legal and regulatory issues that need to be dealt with. Generally these are not substantially different from what would be expected in Australia; however the amount of new names and legislation can be confusing. Sections 5, 6, 7 and 8 provide information for Australian companies interested in targeting the European market. The Appendices list key government, industry associations and companies in the energy efficiency sector in Europe with weblinks for Australian companies to undertake further research.

Page 8

Section 2

Key EU Legislation Driving the Energy Efficiency Sector

01.

Energy Efficiency Plan (2011 and 2006 Action Plan)

On 8 March 2011 the European Commission released its long awaited Energy Efficiency Plan. The Plan is not a legislative proposal, instead it relates to a number of other EU Directives and Commission initiatives such as the Energy Services Directive, the Energy Performance of Buildings Directive and the Ecodesign and labelling Directives. The 2011 Plan is intended to replace the 2006 Action Plan.

The Energy Efficiency Plan (2011) has been expanded to cover demand-side energy efficiency as well as the generation of heat and electricity and electricity and gas networks. The transport sector is covered by separate legislation.

It was recognised by the EU that the existing policy measures would not guarantee achievement of the 2020 target of 20 percent energy savings and substantial new measures were required. The new measures include: Targets - The plan proposes a two-step approach to target setting: firstly to allow member states to set their own indicative targets and secondly that the Commission will review progress in 2012 and propose binding targets for all Member States if it appears the 20 percent target will not be achieved. Public Sector - The Plan proposes that the Public Sector should set an example, since it owns or occupies 12 percent by area of the entire EU building stock. The Plan aims to double the renovation rate to at least 3 percent per year and that the refurbished buildings should be at the level of the top 10 percent of the national building stock. ESCO - The Commission calls for Energy Service Companies (ESCO) to play a more important role in both the private and public building and industry sectors. There will be legislative proposals to increase their role in achieving energy efficiency in the EU.

The Plan also covers financing issues, promoting smart meters and smart grids, expanding the National Energy Efficiency Action Plans to cover the entire energy chain in addition to energy demand. Industry groups and Energy Efficiency groups have been critical that the latest Plan does not set binding targets (deferring this decision to 2012 if it becomes apparent that voluntary targets will not achieve the 20 percent Energy Efficiency target of 2020). Critics argue that there are clear indications that the 20 percent target will not be met and that new policies are required to double the rate of energy efficiency.

In June 2011 The European Commission created a new law to push the public and private sector organisations to save energy, putting the EU on track for 20 percent savings by 2020.

According to the new law, energy retailers and distributors will have to achieve energy savings annually equal to 1.5 percent of sales volumes through improving consumers energy efficiency. National governments can opt for an alternative programme as long as they achieve the same results.

Page 9

Public administrations will have the added obligation to reduce energy use by renovating 3 percent of their floor area annually. Dependent on the rate of negotiations between EU member states and the European Parliament, the law will become binding a year after its adoption, but it could be concluded by autumn 2012.

02.

Directive on Energy End-use Efficiency and Energy Services (2005)

The Directive on Energy End-use Efficiency and Energy Services came into force on 17 May 2006. It creates an institutional framework for energy efficiency improvements in all sectors and for energy services at the European level. The Directive covers most forms of energy sold to end users, including transport fuels. The Directive defines and sets efficiency saving targets on a national level that will require the development of detailed Action Plans by each member state of the EU. Member states Action Plans are called to: set an indicative 9 percent reduction target in end-use energy consumption by 2016; provide mechanisms, incentives and institutional, legal and financial frameworks to achieve this target; and create the conditions for the development and promotion of markets for energy services.

Although the targets are indicative and thus not mandatory, member states have a clear legal obligation to adopt and aim for the targets using appropriate cost-effective energy services and other energy efficiency improvement measures. The member states National Energy Efficiency Action Plans need approval from the commission and is reviewed every three years (2007, 2011 and 2014). This Directive was delayed by a lengthy debate about methodological questions, like how to measure energy efficiency, which deferred its implementation. It is expected that this directive will be reviewed and recast in 2011/12 to increase the targets for member states and, if necessary, introduce mandatory targets as foreshadowed in the recently released Energy Efficiency plan.

03.

Revised Energy Performance Directive for Buildings (2002 & 2010)

The Directive for the Energy Performance of Buildings (EPBD) is the main legal instrument in Europe for improving energy performance in buildings. It provides for a comprehensive and integrated approach towards improving the efficient use of energy in both new and existing residential and commercial buildings. The EPBD covers energy needs for thermal insulation, space and hot water heating, cooling, ventilation and lighting. The original EPBD was adopted in December 2002. This first directive provided a common methodology for calculating the energy performance of buildings and obliged member states to draw up minimum standards. These calculations should be applied to all new buildings and to existing buildings with a usable floor area above 1,000 m when they undergo a major renovation. It was widely agreed that the first EPBD was poorly implemented although its overall impact has been difficult to assess. Member States were obliged to implement the provisions of the directive in 2006, but most decided to delay until January 2009. However, compliance rates for existing buildings is 55 percent and for new buildings is 70 percent which indicates relatively wide adoption. The Directive was recast in 2010 to help the EU meet its 2020 target of a 20 percent reduction in energy consumption through energy efficiency. The most significant improvements brought by the 2010 revisions were; the removal of the 1,000 m threshold for renovation in existing residential buildings which avoids the exclusion of 70 percent of the building stock from the scope of the Directive; and the setting of minimum energy performance requirements when a building element is refurbished or retrofitted.

Page 10

These changes to the EPBD will take effect when the national regulations have been implemented and applied; a process which is estimated to occur by the beginning of 2014. The recast Directive has a requirement for controls to be implemented by member states. There are now penalties for non-compliance that member states must report to the Commission. Article 9 of the legislation states that members shall ensure that: 1. by 31 December 2020, all new buildings are nearly zero-energy buildings; and 2. after 31 December 2018, new buildings occupied and owned by public authorities are nearly zeroenergy buildings. These ambitious targets are for all new buildings in all sectors; from single-family dwellings to commercial office buildings. Globally these targets are considered the most ambitious. If the EPBD is implemented at the national level, the removal of the threshold for refurbishment would mean the Directive would encompass nearly all homes. EPBD remains a framework which is yet to be implemented at the national level and member states will determine the optimal cost level.

The EPBD legislation is the main driver for energy efficiency in buildings. Australian companies with new, cutting edge technology should look to the early adopters of this legislation like Austria, Denmark, Germany and Sweden when targeting European markets.

Each member country of the EU has taken a different approach in complying with the legislation. Denmark, Sweden, Germany and Austria have emerged as successful leaders in adopting and implementing the EPBD into national initiatives to promote green buildings. There will likely be continued inconsistent adoption of the new Directive with certain member states with higher technical and functional standards more advanced in their implementation.

04.

Eco Design Directive (2005 & 2010)

A revised energy labelling directive adopted in May 2010 extended the scope of the Eco Design Directive to include energy-related products and products in the commercial and industrial sectors. New energy labelling classes have also been introduced. The scope of the Directive was extended to include energy-related products (including construction products like windows, insulation materials and water conservation taps which do not necessarily use energy but have a significant direct or indirect impact on energy savings. Australian products which offer greater energy efficiency in these areas will gain a marketing advantage. The Ecodesign directive sets mandatory ecological requirements for energy-using and energy-related products. Ecodesign requirements address only the main environmental parameters of products which have significant sales and trade in the EU (more than 200,000 units). If for instance, Ecodesign requirements for household refrigerators had been set under the Ecodesign Directive, any refrigerator which does not comply with these requirements will not qualify for the CE-marking and therefore cannot be sold in the EU. Light bulbs, cars and most electrical appliances (e.g. refrigerators, stoves and washing machines) carry the EU Energy Label. The energy efficiency of the product is rated in energy levels ranging from A+++ to G on the outside label. 'A' stands for the most energy efficient and 'G' for the least energy efficient.

Page 11

Apart from the clear color-coded classification there is also other information on the energy label. For example, the energy label for light bulbs often shows its 'lumen', an indication of perceived power of light, and 'Watt', the consumption of joules of energy per second. In 2010 the A+, A++ and A+++ qualifications were introduced for some electrical items.
The EU Energy Label

Original Energy Label

Revised Energy Label (2010)

05.

EU Emission Trading Scheme (2003 & 2009)

The EU Emission Trading System (ETS) is a cap and trade system. The total level of emissions allowed is fixed and participants have individual quotas. Within the ETS participants are allowed to trade their allowances as they require and within a system where the EU can cut emissions cost-effectively. Launched in January 2005, the EU ETS is a key tool for achieving the EU's aim of reducing its GHG emissions by at least 20 percent by 2020 from 1990 levels or by 30 percent in the event of an international agreement. The ETS currently covers over 10,000 installations in the energy and industrial sectors which are collectively responsible for close to half of the EU's emissions of CO2 and 40 percent of its total greenhouse gas emissions. When companies pass along the extra costs for carbon emissions to consumers, this should create a stronger incentive for demand-side energy efficiency. However, in practice to date there has been no consensus as to whether the Trading Scheme has resulted in improvements in Energy Efficiency. The EUs own research indicates that efficiency improvements in the energy and industry sectors may remain limited since companies can make substantial use of credits from the Kyoto Mechanisms. The EU is considering alternative mechanisms for financing energy efficiency projects. In the recent Energy Efficiency Plan (2011) and revised EPBD, member states were asked to introduce financial incentives to adopt energy efficient solutions. Solutions to be considered include low interest loans, pay-as-you-save schemes and tax incentives. The EU has directed the European Investment Bank to establish a 500 million Energy Efficient Fund to finance new projects.

Page 12

06.

Member States Initiatives

Policy measures implemented across the different member states and the different sectors vary according to national opinion, national practices and the specific energy uses within a member state. For example, with regards to the EU Renewable Energy Target, the member state targets vary from 10 percent for Malta to 49 percent for Sweden. Energy Efficiency targets are not yet binding as they are at a member state level, however there is an expectation that they will vary across the EU to reflect the different baselines of the individual countries. Some of the recent national initiatives include: Italy established a national energy efficiency agency called the Energy Efficiency Technical Unit (UTEE). UTEE will provide technical support to key actors involved in energy efficiency and seek to improve the national energy efficiency strategy. The Netherlands strengthened standards for newly built houses by 25 percent in 2011 and by 50 percent in 2015 compared to the standard required in 2007. As of 2017, newly built non-residential buildings have to be 50 percent more energy efficient compared to the 2007 standard. The Netherlands has also implemented a wide range of fiscal incentives to encourage energy efficiency in the built environment. The Netherlands has implemented a wide range of incentives to encourage energy efficiency in construction. Measures include subsidies for energy saving advice, glazing, sustainable energy installations and improvements in energy efficiency by 4 or 5 energy label steps. In France the government has allocated approximately 50 percent of funds (EUR208 billion AUD285 billion) from the New Green Deal to help renovate high energy use buildings and to build energy-positive buildings. One specific project is the Renovation of Old Districts scheme which will mobilise EUR380 million (AUD520 billion) to renovate public and private buildings to make them more environmentally friendly. Each district renovation will require specific products and services. The government has already approved 40 town renovations including Bordeaux, Calais, Nice, Aix en Provence and Saint-Denis. In Finland on 1 January 2010, a law came into force creating obligations for energy companies to provide feedback on customers energy use and energy efficiency measures. In Spain there is now an obligation to revise and update energy efficiency requirements once every five years and Spanish legislation clearly outlines that requirements must be met in relation to: improved energy performance of heating and cooling equipment; improved insulation of heat transport equipment; better regulation and control in air-conditioned premises; mandatory metering systems for consumption in collective systems; gradual elimination of less efficient generation equipment.

Germany continues to be a leader in the building sector. It plans to make the CO2 building renovation programProgram more effective in order to increase the current rate of building renovation. One planned action is to lower the barriers to renovations in property law to improve energy efficiency. In the Czech Republic Green Savings program (www.zelenausporam.cz) was launched in April 2009 and reformed in August 2009. It provides householders (family houses and apartment buildings) grants of up to half of the cost of insulating their homes. It also provides grants for new construction meeting passive house standards, as well as for the installation of heating equipment using renewable sources of energy. Improvement measures must result in specific annual heat savings to qualify for a grant.

Page 13

Major electricity producer CEZ (www.cez.cz) announced a pilot project called "Smart Region", the first of its kind in the Czech Republic. Within five years, the company plans to invest CZK half a billion in the introduction and testing of intelligent technology in the distribution network. The project will equip approximately 4,500 households and businesses with "smart" energy meters, build infrastructure for electric vehicles, install home automation and monitoring units for distribution networks and involve local energy production units in the networks.

Page 14

Section 3
01.

Energy Usage in Europe

Energy Consumption

EU member states are currently consuming 17 percent of the worlds energy production. Buildings (households and service sector) are accountable for approximately 40 percent of the final energy consumption (the energy delivered to the customer). Following substantial efforts on the ground, the energy consumption of the industrial sector has decreased from 34 to 28 percent. As a proportion of energy consumption however, the transport sector has increased its share of energy usage in almost a direct correlation to the reduction in the industrial sector increasing from 26 percent in 1990 to 33 percent. The increase of energy consumption in the transport sector is likely to reflect an increase in demand for transport as well as an inability to find substantial savings in the sector. Germany, France and the UK are responsible for the consumption of approximately 50 percent of the final energy produced in Europe. With the additional consumption of Italy, Spain and Poland, the total is around 70 percent. The contribution of each energy source varies greatly among countries, depending on their energy resources and climate. For countries such as Cyprus, Greece, Luxemburg, Ireland and Malta, oil represents around 70 percent of the energy consumed, due to the large amounts of oil used in the transport industry and relatively low energy usage in industrial and the built environment. In the Nordic countries (Sweden, Finland, Norway) and some Central European countries (Slovakia, Czech Republic, Hungary and Romania), countries have made a positive decision to reduce their reliance on oil as an energy source. It now accounts for only 20 - 30 percent of energy and has been replaced by gas or electricity. Biomass is also responsible for a significant contribution to energy sources in Austria, Latvia, Estonia, Finland and Sweden.

Page 15

Proportion of Energy Usage EU Member States Greece 2% Czech Republic Finland 2% 2% Romania 2% Austria 2% Sweden 3% Belgium 3% Netherlands 5% Poland 5% Spain 8% Italy 12% France 14% Denmark Ireland Portugal 1% 1% 2% Hungary 2% Slovakia 1%

Germany 20%

UK 13%

Energy consumption of households per permanently occupied dwellings, calculated at normal climate Tonnes of Oil Equivalent / Dwelling 2008 2.5 2 1.5 1 0.5 0 Bulgaria Romania Greece Latvia Hungary Denmark Portugal Slovakia Belgium Sweden Austria Cyprus Finland Poland Italy Malta Czech Rep. Slovenia United Kingdom France Germany Netherlands Croatia Ireland Norway Spain EU27

Page 16

02.

Energy Prices

EU consumers saw a 50 percent energy price increase in real terms between 1990 and 2008. Sector growth was 47 percent in road transport, 47 percent for households (weighted average of electricity, gas and fuel oil) and 69 percent in industry. Fuel prices have sharply increased especially for oil products (+113 percent for fuel oil in industry and +68 percent for heating oil for households) and natural gas (+89 percent in industry and +31 percent for households). However, electricity prices for both industry and households have decreased between 1990 and 2008 (by 3 and 4 percent respectively) for several reasons including deregulation of energy markets and privatisation of national companies. Italy, Denmark, Germany, and the Netherlands have the highest electricity prices in Europe. Italy is renowned for having some of the highest electricity prices in the world. Interestingly, small scale residential solar projects in Italy for electricity generation have now achieved parity with the major electricity suppliers providing power to new houses where connection costs apply. Energy consumption for the industrial sector is significant across Europe with the major markets having a relatively small spread. Electricity Prices for Households
3,500 kWh/year Austria Belgium Bulgaria Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom 0.19 0.19 0.09 0.15 0.25 0.09 0.13 0.12 0.23 0.11 0.17 0.17 0.19 0.11 0.10 0.19 0.17 0.14 0.17 0.10 0.16 0.13 0.17 0.15 0.13 7,500 kWh/year Austria Belgium Bulgaria Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom 0.18 0.17 0.08 0.12 0.22 0.09 0.11 0.11 0.21 0.11 0.15 0.16 0.26 0.11 0.09 0.17 0.22 0.13 0.15 0.10 0.16 0.12 0.16 0.15 0.12 2,000 MWh/year Austria Belgium Bulgaria Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom 0.10 0.11 0.06 0.11 0.09 0.06 0.07 0.06 0.11 0.09 0.13 0.12 0.12 0.09 0.07 0.11 0.11 0.10 0.09 0.08 0.14 0.10 0.11 0.07 0.10 24,000 MWh/year Austria Belgium Bulgaria Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom 0.08 0.08 0.05 0.09 0.09 0.04 0.06 0.05 0.08 0.08 0.10 0.08 0.10 0.07 0.07 0.07 0.09 0.08 0.07 0.06 0.11 0.09 0.08 0.06 0.08

Average amount in euro per one kilowatt-hour of electricity for industrial consumers. Incl. energy taxes & VAT. September 2010. Europes Energy Portal (www.energy.eu) provides estimates of the market prices for electricity across the EU for both households and industry.

Page 17

03.

Energy Intensity

The amount of energy required to produce one Euro of GDP varies significantly between European countries. This difference can be attributed to country specific variances in climate, industry specialisation, transport infrastructure and urban patterns. To better analyse the real difference within the EUs countries the Odyssee MURE project attempted to eliminate these factors to enable better comparison of Member States performance. Their research showed that since 1990 there has been a decoupling between energy use and economic activity; since 1990 the EU has reduced its energy consumption to a growth rate of only one third of its GDP. Energy efficiency has been improved and energy intensity lowered with the help of several years of relatively steady economic growth, a more intensive use of industrial facilities as well as a faster replacement of existing equipment with more efficient and newer models.

In Europe there is generally a link between GDP and decreasing energy intensity. There is evidence to suggest that strong GDP growth leads to greater energy efficient measures as there is more investment taking place and therefore more scope to adopt new energy efficient technology.

The GDP forecast for the EU area is +1.8 percent in 2011. The country growth rates for the major EU economies are: Poland 4.1 percent, Germany 2.4 percent, UK 2.0 percent, France 1.7 percent, Netherlands 1.7 percent, Italy 1.1 percent, and Spain 0.8 percent. Impressively, these countries account for 80 percent of the EU GDP. Sweden has the fastest projected growth rate in the EU at 4.8 percent. Since 2005 energy consumption in the EU has been decreasing at a remarkable rate of 0.5 percent per year despite a rapid expansion of the economy (until 2007 EU GDP was growing at a rate of +3 percent per year). This trend was probably influenced by the rapid increase in international energy prices as well as the energy efficiency and climate policies implemented by the EU Commission and national governments. Adjusted final energy intensities EU Average = 100 200 180 160 140 120 100 80 60 40 20 0

Austria

Romania

Latvia

Lithuania

Bulagria

Sweden

Greece

Hungary

Czech Republic

Luxemburg

Slovakia

Poland

Estonia

Denmark

Portugal

Belgium

Finland

Germany

Slovenia

Netherlands

Ireland

Norway

Croatia

Cyprus

France

Italy

Spain

UK

Malta

Page 18

04.

Energy Efficiency Progress

The Industrial sector achieved the largest energy efficiency improvement, with a regular average energy efficiency gain of 1.9 percent per year between 1996 and 2007. In Europe, the current emphasis is to reduce the energy usage of buildings and the transport sector. There has been a minor slowdown in energy efficiency progress in most EU countries since 2000. The most recent analysis concludes that while the Global Financial Crisis does not fully account for this slowdown in the EU markets, the differing economic growth forecasts will likely have an impact for the demand for energy efficient products. However, this trend is not seen in Cyprus, Hungary, the UK, Norway, Sweden, Greece and Belgium. In the Czech Republic, Portugal and Italy, energy efficiency gains have been apparent and impressive since 2000 (however there was no reported gain from 1996 to 2000). Mainly as a result of an aged transport sector, there has been minimal energy efficiency improvement registered since 1996. However, countries like the UK, Norway, Finland and Sweden are proving increasingly progressive on the subject of Energy Efficiency due to previous investment and a focus on environmentally friendly initiatives.

Although it is easy to conclude that countries with the lowest energy intensities or the best energy efficiency progress are the most attractive EU markets for Australian companies, this is not entirely accurate. Countries with a significant proportion of energy intensive industries or low progress in achieving energy efficiency progress could in fact be markets which boast the most potential.

Energy Efficiency Progress by country (1996-2007)

Page 19

Section 4

Sector Opportunities in Energy Efficiency

Frost and Sullivan have estimated that the Green Building market in the EU will grow by 30 percent per annum in the coming decade (N830, Nov 2010). 01. Green Building Products and Materials

On a domestic level within Europe there are approximately 200 million dwellings. Each year an additional 2.2 million new dwellings are built and at the current renovation rate of 1.2 percent approximately 2.4 million buildings are renovated. The sector as a whole is valued at EUR2 trillion (AUD2.74 trillion) annually. The EU is pushing to raise this renovation rate significantly through financial incentives to encourage energy efficient renovations. It is anticipated that a rate close to 2 percent refurbishment will achieve the 2050 target of 80 percent reduction of energy usage. Although the majority of building stock is residential, commercial and government building stock is still important to consider. The Institute for Building Efficiency notes that approximately 2 percent of global commercial floor space is newly built with another 2 percent renovated each year. Interestingly in Europe the refurbishment target for Public buildings has been raised to 3 percent. Energy efficiency has become an unlikely driver for the building technology market sector even during periods of relatively low growth as the energy efficiency paybacks have been attractive enough to continue the momentum for energy performance and efficiency retrofits. Within the EU there is obviously great variation in climatic conditions. Generally the level of investment in energy efficiency products is greater in the northern regions because of the cold. For instance the average wall insulation thickness for new buildings in Sweden is 400mm and in Spain and Italy it is 50mm. However solutions developed in Australian are often more suited to the countries near the Mediterranean due to the climatic similarities.

The EU Building Sector is estimated at 9.9 percent of the total EU GDP with a total of EUR1.2 trillion (AUD1.64 trillion) annual construction investment, which is larger than the entire Australian economy (European Construction Industry Federation).

a.

Heating, Ventilation and Air Conditioning (HVAC)

Germany, Scandinavia and the UK are the three largest markets in this sector in terms of revenues and accounted for almost two-thirds of the total sales in 2009 (Frost and Sullivan 2009). The ongoing and increasing emphasis on well-insulated buildings is creating demand for additional investment in advanced heating, ventilation and air conditioning and well designed smart sun control and shading systems. Sales of products for domestic use, currently a small segment in the overall market, are set to double in the next few years. The commercial sector which accounts for more than half of the total revenues is reliant on refurbishment and replacements. The Government sector is expected to grow in the coming years, while the Industrial sector will likely shrink if the EU does not announce significant new industry requirements to minimise energy usage or improve comfort levels.

Page 20

b.

Building Automation Systems

The market for Building Automation systems is estimated at EUR4 billion (AUD5.47 billion).

With the introduction of Spanish legislation to enforce energy efficiencies in the construction sector, now is a good time to be active in the Spanish market. However, the legislation covers new construction which, given the current situation, is limited. Most of the opportunities are to be found in the refurbishment sector. Although there is significant interest in new technologies, innovative products and services demand a higher price and this naturally puts suppliers under pressure to adjust their profit margins. Ecopower Ventilacin Hbrida S.L. (local representative of an Australian manufacturer of hybrid ventilation systems)

In regards to the implementation of the EPBD, the Nordic countries such as Denmark, Norway and Sweden lead the pack closely followed by Germany and Austria. Recently other EU Member States such as the UK, Ireland, Spain and France are gaining momentum for the implementation of the EPBD. From a market perspective, on the demand side, Denmark, Germany, Austria and the UK currently demonstrate maximum demand for building automation and control and energy efficiency products respectively. However the market becomes more complex when considering the payback time for investing in energy saving measures. While northern Europe leads the region in terms of the adoption of strong regulation to drive energy savings in buildings it is Spain and Italy who are recognised for the shortest payback time from the adoption of energy saving measures. Pablo Martin, Director, ASEFAVE (Spanish Association of Manufacturers of Windows and Curtain Walling) By December 31, 2018 all newly-constructed public buildings in Europe, including Spain, will need to have zero energy consumption. For private buildings this will be obligatory by December 31, 2020. Recent Spanish legislation is proving to be a major driving initiative to reduce the negative impact on the environment of products such as windows and insulation materials which will also contribute to energy saving during their life cycle. There is a National Window Renewal Plan, implemented via the Regional governments, that offers subsidies to consumers. The major focus to date has been in the refurbishment sector. The current trend is to use curtain walling that capture and generate energy and which effectively improves the energy classification of the building. For more information see: www.asefave.org c. Heating Devices (Heat Pumps)

The European heat pumps market has an estimated value of AUD4.35 billion in 2008, with an estimated 420,000 units sold that year. The market has witnessed considerable growth over the recent years, in part due to Europe wide and local legislative drivers and also due to the growing need for energy efficiency among consumers. Prior to the recession the European heat pump market had been growing rapidly. The market experienced a decline in sales in 2009 with a recovery in 2010. Certain regions and technologies have brighter prospects than others. The competitive structure is quite dynamic with constant geographical expansion within Europe and the entry of firms from Asia with backgrounds in other HVAC appliances encouraging competition between suppliers. d. Photovoltaic (PV) for the Built Environment

The European Building Integrated Photovoltaic (BIPV) market has seen exceptional growth in recent years. What started as a luxurious niche segment of the PV market, has today established itself as an active and more feasible option for commercial and residential buildings. However, demand is directly linked to legislative support and the

Page 21

development of the industry is largely determined by government and EU-set targets for the adoption of renewable energy. These targets are driven by incentive based legislation. This has made the residential sector the largest consumer segment for BIPV. The Italian market for PV Solar has been very strong over the past 12 months. Spain, while declining is still a significant market and Germany remains Europes number one Solar PV market. e. Energy Efficient Lighting

Lighting can account for as much as one-fifth of household electricity consumption. The European Commission has note that the most efficient lighting technologies use up to five times less electricity than the least efficient Energy saving bulbs and can reduce a household's total electricity consumption by 10-15 percent. The energy efficient lighting market in the EU has undergone a period of rapid change in the last five years. The requirement for greater energy efficiency in buildings has been the main driver for the retrofit of existing commercial stock and ensuring innovative technologies are deployed in new buildings. In the EU non-clear incandescent bulbs have already been withdrawn and clear incandescent bulbs are being phased out gradually. Bulbs of 100W and 75W or more have already been phased out. This limit will be reduced gradually until 2012 (60W in 2011 and in 2012 40W and under). In the medium term this sector is expected to grow by 9 percent per annum. This growth is driven by technology advancement (especially in LED lighting) and the fact that all energy inefficient lighting will be banned in 2012 in Europe. Spotlight on Siemens Osram Osram is one of the two leading light manufacturers in the world (Phillips the Dutch HQ company being its major competitor). Turnover in 2010 financial year was EUR4.7 billion (AUD6.4 billion) with 40,000 employees. 70 percent of its turnover comes from energy-efficient products. OSRAM operates the entire lighting value chain and its expenditure for research and development is approximately EUR250 million (AUD342 million), 5.5 percent of turnover. The German conglomerate Siemens (EUR76 billion (AUD104 billion) turnover 405,000 employees) currently owns Osram but will list it separately in late 2011. Siemens said that while it intends to remain a major shareholder, Osram needs entrepreneurial flexibility to develop cutting-edge green and energy efficient lighting solutions and products in a market that is increasingly dominated by new technologies.

02.
a.

Energy Service Companies (ESCOs) and Green IT

Energy Service Companies

The initial Energy Service Company (ESCO) started in Europe more than 100 years ago. Over the past decade there has been an increased interest within Europe for the provision of energy services. The EU believes developing ESCOs in Europe is a key way to work around some of the disincentives to invest in energy savings measures to reach the energy efficiency target. One of the key limitations of the implementation of the EPBD was the lack of Energy consultants to carry out the required audits. In March 2011 the new EU Energy Efficiency Plan foreshadowed the use of legislation to build the numbers and size of ESCOs. ESCO offer energy services, such as: energy analysis and audits, project design and implementation, monitoring and evaluation of savings,

Page 22

energy and/or equipment supply, services (space heating/cooling, lighting, etc.).

ESCOs can guarantee the energy savings by implementing an energy efficiency project and remuneration can be directly tied to the energy savings achieved. In some cases ESCOs, such as Siemens Building Technologies assist in arranging financing for the installation of an energy project they implement. Energy supply contracting (delivery contracting) is focused on the supply of a set of energy services (e.g. heating, lighting, motive power, etc.) mainly via outsourcing the energy supply.

The market was estimated to be around EUR900 million (AUD1,232 million) in 2009 with growth of 10 percent. Germany remains the largest market, but growing at the slowest rate. France is the second largest market for ESCOs. Scandinavia, Czech Republic and Poland are markets with significant potential. (Frost and Sullivan 2009)

The Central European Government currently offers subsidies (up to 75 percent) for energy auditing costs and there are also a number of incentives applicable to both residential and industry sectors available from the Autonomous Community governments (17 in all). Energy auditing is considered to be a new sector in Spain. However, the sector currently needs more specialists with better training bearing in mind that the level of savings achieved is directly related to the level of training. Energy audit companies income depends on the savings made by their clients. Antonio Lpez-Nava, Manager, Association of Energy Efficiency Companies b. Green IT

The energy industry is currently undergoing a transformation process resulting in stronger decentralised structures and smart systems. To date electricity generation has been dominated by central power production whereby electricity suppliers produced energy according to consumption prognoses to balance demand and supply. However, this needs to be balanced sometimes at high costs. The increasing use of small scale renewable energy as well as decentralised production of energy supply such as block heat and power units, micro combined heat power units for private consumer usage, mini wind turbines etc. provide additional challenges for the energy sector. Both are providing fluctuating energy levels from a range of sources leading to a more complex energy market. Green IT is presently being used to overcome the current challenges in the energy market via measuring consumption (smart metering), balancing energy demand, and integrating volatile and decentralised energy feeds effectively. Please see next section for more information. Another form of Green IT is in datacentres where Europe has witnessed a strong growth in the past 3 to 4 years due to the increase in data storage and transfer needs of banks, hospitals, government bodies, telecom operators and hosting facilities. During the last few years the average power requirement per rack has dramatically increased from 1-3 KW to 24-30 KW per rack (Frost & Sullivan). The German research institute Fraunhofer has calculated that ICT in Germany equated for 10.5 percent (55.4 TWh) of the overall German energy consumption in 2007 (The EU average was 8 percent), compared to 7.1 percent in 2001. If there are no counteractive measures energy consumption is expected to grow to more than 20 percent by 2020, due to the exponential growth of data transfers, usage of images and video as well as Internet radio and TV.

Page 23

In the wake of spiralling energy costs, concepts such as energy efficiency and free cooling have come to play a very significant role in increasing the efficiency and lowering the operating costs for Datacentres. The biggest markets for data centres are the UK and Germany. The business model that consultants use is often similar to an ESCO where income is derived from achieved savings. We suggest that Australian companies with an innovative technology/product in this area prioritise the UK and German markets initially as these have the greatest concentration of datacentres in Europe.

03.

Smart Grids & Smart Metering

The term smart grid has broad meaning. However it most commonly refers to the combination of ICT with a traditional power grid, enabling the grid to deal with fluctuations in current generated from renewable energy. Smart grids incorporate many features, such as smart metering, that contribute to increasing energy efficiency. In the context of the EU, the smart grid is defined around the emission reduction targets for the year 2020, the increased use of renewable energy sources and the desire to link the energy markets across all member states. The EU is currently formalizing common base functions of smart meters and is making significant investment in this sector to reduce energy usage. There is significant investment taking place in the energy infrastructure in Europe, particularly driven by increasing investments in renewables, however for purposes of this report a focus will be placed on demand side measures relating to smart meters. Italy was the first major adopter of smart meters with 30 million smart meters rolled out in 2000. Sweden, the Netherlands, Norway and Ireland followed soon after.

Currently the largest growth in this sector is in the UK, Spain and France with estimated market size approaching 20 million smart meters annually.

Smart grid products and services which are able to communicate price signals to consumers, and therefore better monitor effective use of energy, are also growing rapidly. As an example of the levels of investment planned it is envisaged that Spain will invest over the 10-year period, 2008 2018, approximately EUR5.5 billion (AUD7.5 billion) to implement a comprehensive smart grid network. Smart networks and systems design, are also being increasingly applied to key utility sectors, including energy and water, and infrastructure areas such as transport and logistics. Smart grid networks and applications for both energy and water, intelligent transport systems to minimise congestion, and advanced building management systems to control temperature and ventilation are just some examples of the presence of smart technology in the market. The growth of this sector is also creating increasing demand for new sensor technologies, actuators and advanced monitoring solutions.

Page 24

Spotlight on French Smart Grid Projects As a pioneer, Voltalis launched a project in Bretagne in 2010. The company installed a grid controlling power dropouts (from 10 to 20 minutes) on water-heaters or electric heaters in one thousand houses. In 2011, the company decided to equip other thousands sites with its grid controlling power named BluePod. This Smart Box can drop the consumption of electricity between 5 to 12 percent without affecting your electricity consumption. EDF is a major player in the French market. During the winter of 2009, its private subsidiary Edelia installed similar devices in 600 homes in Bretagne. Consumers are warned by text or email at peak times and are warned that certain electric appliances may be cut off for short periods of time. The Premio Project began in 2007 and is a smart-grid demonstration facility. The EUR4 billion (AUD5.5 billion) project is funded 50 percent by the Provence-Alpes-Ctes dAzur region (where the project is based) and 50 percent by private partners (of which EDF is the largest partner). For more information see: www.projetpremio.fr/ The European Commission faces a number of challenges with its smart grid initiative, primarily due to different regulatory measures and infrastructure in each individual member state. For example Sweden and Italy took the initial lead on installing smart grids; however each country has used smart metering for relatively different reasons. For instance, Italy initially installed smart meters to curb electricity fraud whereas in Sweden it was to reduce the time and cost in reading meters. Other issues the Commission are considering include: How to securely manage the large amounts of data that will be generated by smart metering terminals. How will the smart grid interact with smart appliances and what software protocols will be adopted to handle communication between the grid and these devices? Increased information to empower end users to manage their power usage and consumption (Will consumers be responsive to pricing based on usage and time of day?). Optimal electricity generation, efficient supply transmission/distribution and maximized contribution from diverse energy sources.

By the end of 2012 the aim of the European Task Force for Smart Grids is to: Develop and implement Smart Grid standards Address data privacy and security issues Develop regulatory incentives for Smart Grids deployment Guarantee competitive Smart Grids services to customers Provide continuing support for innovation and its rapid application

For more information see: ec.europa.eu/energy/gas_electricity/smartgrids/taskforce_en.htm

Page 25

Case Study - The Stockholm Royal Seaport In central Stockholm 236 hectares of brownfield industrial area is being redeveloped into a waterfront area, one of Europes largest urban development projects. The key objective of Stockholm Royal Seaport is to cut CO2 emissions from the current average for Stockholm on 4 tonnes to 1.5 tonnes per person per year by 2020. The longer term goal is that the district will be entirely free from fossil fuels by 2030. The Stockholm Royal Seaport project aims to develop a smart grid for integration of consumers and producers into the utility electrical grid, from the refrigerator to the harbour. It will integrate concepts such as active house, local storage, decentralised renewable production, electric vehicle charging and an electrified harbour into the grid. Fortum, ABB, and KTH (Royal Institute for Technology) are leading the smart-grid component with others in addition to several other contributing partners like Ericsson and Electrolux. Mr Per Langer (Managing Director Fortum Sweden) noted "One objective of the project is for us to find a way to lead and drive the conversion to a more sustainable energy system. A developed smart electricity grid means that the consumers, society and we as a company all will receive benefits. In the future we will need to use our resources more efficiently and a smart electricity grid will make it possible for both large-scale and small-scale production to benefit from each other," (as reported on the Swedish Energy Agency website). Background: Stockholm is the European Research Centre for European Smart Grid and Electrical Storage. It is a collaboration between researchers and industry funded by the European Institute of Innovation and Technology with over EUR100 million (AUD137 million) in EU and industry funding. Stockholm region is rapidly developing into one of the key research and commercialisation global smart grid clusters. With the goal of training 1,200 PHD students and 20 spin offs over the first five years of the project. Key Facts Site Area: 236 hectares. Distance to City Centre: 2.1 miles Building Start Date: 2010 Building Completion Date: 2025 First Occupancy Date: 2012 Number of New Apartments: 10,000 Number of New Work Spaces: 30,000 Commercial Area: 600,000 sqm Energy Target: 55 kWh sqm/year

For more information see: www.stockholmroyalseaport.com/ This presents opportunities for Australian companies with innovative products or services to form European alliances and seek collaboration partners.

Page 26

Section 5
01.

Before Entering the Market

Intellectual Property Rights

Intellectual property rights are intended to protect the creativity of businesses and individuals. A patent covers the function, operation or construction of an invention. To be patentable a function must be innovative, have an industrial application and be described in such a fashion to permit reproduction of the process. A trademark is a brand or name related protection. It can be a symbol, word, or words legally registered as representing a company or product. A trademark identifies the origin of goods and services and helps to differentiate between products and services. A design only covers the appearance of a product. A design cannot protect the function of a product.

Although Australian companies should exercise due diligence in choosing European partners, theft of intellectual property is not a major problem in Europe compared to other regions in the world. Despite this, technology-based companies should work with legal specialists to develop a global intellectual property protection strategy, using an appropriate mix of trade secret, copyright, or patent protection.

02.

Patents

The EU has been debating the introduction of a single unified patent system for ten years. As of today, inventions can be protected in Europe either by national patents or European patents granted centrally by the European Patent Office (EPO). Member States have their own patent offices which deal with applications for national patents. The protection conferred by a national patent is limited to the territory of the State concerned. However as of 13 April 2011 the European Commission announced that it intended to proceed with the implementation of enhanced cooperation with 25 of the EU member states. EU countries have a "first to file" approach to patent applications which makes early filing a priority for innovative companies. If the applicant chooses to apply for a European patent, the application will be reviewed by the EPO, based in Munich. The EPO provides a single procedure for granting patents in Europe. It is an intergovernmental organisation comprising 38 members (27 EU Member States + 11 other European countries). It was established in 1973 following the signature of the European Patent Convention (EPC). Inventors and businesses can request a European patent by completing one single patent application form in one of the three official languages of the EPO (English, French and German). If the EPO grants a European patent, the full text of the patent, known as the specification, is published in the official language of the EPO chosen by the applicant as the language of the proceedings. At this stage the applicant must also provide a translation of the part of the patent that defines the scope of protection - the claims into the other two official EPO languages. However, this is not enough for the European patent to take effect in most Contracting States to the EPC. The patenting company must choose the countries in which they seek to have protection and validate the European patent in these states. A number of different validation requirements may apply. For example, the patent proprietor may have to pay a fee to each national patent office, comply with various formal requirements and provide a translation of the patent to the official language of the State. The validation costs for a European Patent in 13 member states is approximately EUR12,500 (AUD17,110) and can reach EUR32,000 (AUD43,800) in the 27 Member states. The bulk of this is in translation costs for patents

Page 27

(generally EUR75 85 (AUD103 116) per page) which can be EUR1,500 (AUD2,053) for a typical 20 page patent. For more information see: ec.europa.eu/internal_market/indprop/patent/index_en.htm Unity European Patent System Being Legislated On 13 April 2011 the European Commission announced that it was adopting a recommendation for enhanced cooperation with 25 of the EU member states (Spain and Italy the two notable abstainers) regarding unity patent protection. With these new streamlined arrangements it is expected that patent protection will cost less than EUR2,500 (AUD3,422) for protection in all of these 25 countries (applications would be managed by the EPO). This cost is expected to drop significantly when automatic translation machines have developed enough to adequately translate patent documents. This system will come into law once it has been passed by the participating EU member countries. While there is no definite timeline on this, it can be expected to take at least 1-2 years for this to occur.

03.

Trademarks

The EU-wide Community Trademark (CTM) can be obtained via a single language application to the Office of Harmonization in the Internal Market (OHIM) in Alicante, Spain. The CTM lasts ten years and is renewable indefinitely. For companies looking to protect trademarks in three or more EU countries, the CTM is more cost effective than registering separate national trademarks. The European Commission acceded to the World Intellectual Property Organisation (WIPO) which establishes a link between the Madrid Protocol system, administered by WIPO, and the Community Trademark system, administered by OHIM. CTM applicants and holders can apply for international protection of their trademarks through the filing of an international application under the Madrid Protocol. Similarly international registrations under the Madrid Protocol are entitled to apply for protection of their trademarks under the CTM system. For more information see: oami.europa.eu/ and www.wipo.int/madrid/en

04.

Design Protection

According to European Law a design is the outward appearance of a product or part of it, resulting from the lines, contours, colours, shape, texture, materials and/or its ornamentation. The EU has adopted a Regulation introducing a single Community system for the protection of designs. The Regulation provides for two types of design protection, the registered Community design and the unregistered Community design. A Registered Community Design (RCD) is an exclusive right that covers the outward appearance of a product or part of it. An RCD has a life of five years from the filing date and can be renewed in blocks of five years up to a maximum of 25 years. Applicants may market a design for up to 12 months before filing for an RCD without destroying its novelty. An Unregistered Community Design (UCD) is defined by the Regulation in the same way as the RCD but protects a design for a period of three years from the date on which the design was first made available to the public within the territory of the EU. An unregistered Community design confers on its holder a right to prevent copying. It is possible to designate the European Community in an international application for an industrial design filed with the International Bureau of the World Intellectual Property Organization (WIPO) in Geneva. Registration is EUR350 (AUD479). For more information see the EU Office for Harmonisation in the Internal Market: oami.europa.eu/

Page 28

05.

Copyright

The EUs legislative framework for copyright protection consists of a series of directives covering areas such as; the duration of protection of authors rights, the legal protection of computer programs, neighbouring rights, and the legal protection of databases. For more information see: ec.europa.eu/internal_market/copyright/index_en.htm

Page 29

Section 6

Pathways into the European Market

01.

Identifying your Unique Selling Proposition

The Australian marketplace is not always large enough for a company to work sustainably in just one niche or product. In large competitive markets like Europe it is important to identify the unique competitive advantage of your product in order to differentiate and distinguish your business from the competitors. Companies will need to research each international market to understand what could be their perceived competitive advantage in European markets. It is important to note that a companys competitive advantage in Australia may be quite different from their competitive advantage in a foreign market. Knowledge of customers and competitors are important to developing this understanding. Trade shows are a key part of the European business model and visiting or exhibiting at these fairs is an excellent way to get an understanding of the market and to benchmark your own products or technology. A first approach should clearly state the benefits of the technology to the customer in terms of cost reduction, efficiency and/or return on investment. Approaches should be tailored for each company or sector and ideally in the local language.

02.

Indirect Exporting and Direct Market Entry

Exporting is probably the simplest and easiest market entry form. Exporting can be divided into two broad forms, direct or indirect exporting. Indirect Exporting The two main types of indirect exporting are via an Export Trading Company or via piggyback exporting where your product or service is incorporated into another companys product offering. Export Trading Companies / Brokers are companies whose primary purpose is to sell and market products and services internationally on behalf of other companies. Companies may have different levels of involvements in completing the sale, such as invoicing, payments and freight. Piggyback Exporting is when an exporter utilises another established exporter with complementary products or services to represent a company in overseas markets. The product/services from both companies should be sold to a similar customer base for the system to be effective. The benefit to the exporting company is an expansion in their product offering and potential sales. The benefits to indirect exporting include lower financial commitment (than other forms of export notable direct market entry) and with the right partners, potential for faster development. The disadvantages include the lack of market control and feedback a company receives by handing over the marketing responsibility. Potentially this lack of control will result in lower overall international sales and is generally not chosen if top market share is part of the companys strategy. While indirect exporting has little financial risk there is the real risk through choosing the wrong partners the companies brand could be tarnished. Direct Market Entry Normally the first form of direct market entry is via an overseas buyer, typically a distributor or agent. For a physical product the distributer will place an order that is large enough to ensure the shipping costs are affordable and

Page 30

distribute the product through their established network. In this type of export structure the manufacturing company will be expected to support the distributor with marketing resources and product experience. Over time often greater control and feedback is sought through opening a marketing subsidiary within the EU, not to bypass the distributor network but to get closer to the end customers, perhaps with more direct control over the marketing and joint visits to key accounts. An in market facility for servicing or even manufacturing would be another step to improve customer service and delivery times. Manufacturing could be done directly, through a joint venture or under a licensing arrangement (see below). The advantages of the direct exporting method lay with the control over the marketing strategy, greater customer feedback and over time a potential for greater sales. That said this form of market entry requires management commitment both in terms of staff and financial resources and it can take a longer time (than indirect marketing) to build the foundation of a strong distribution network.

03.

Licensing, Joint Ventures and other Cooperative Strategies

European companies are rather conservative when purchasing products and services and are often reluctant to buy from companies with no proven track record or in-country support. Collaborating with an established European company is a significant step in diffusing this stigma. Licensing One of the first strategies a manufacturer can use in expanding internationally is licensing agreements. Licensing includes arrangements for the foreign licensee to pay for the use of the manufacturers, processing, patents, trademark, technical assistance or some other skill provided by the licensor. Licensing can be a means to develop an investment foothold in an overseas market and as discussed above in the exporting section can be a complement to exporting. Joint Venture and other cooperative strategies The central feature in a joint venture is that ownership and control are shared between the Australian and European companies. Joining forces with other businesses can prove an effective strategy for firms wanting to expand into the EU countries. Cooperation can take various forms such as production agreements, joint ventures, franchises, technology transfer and joint research projects. For more information on cooperative strategies see section 7.

04.

Legal Requirements when Contracting an Agent or Distributor

Firms wishing to use distribution, franchising or agent arrangements need to ensure that the agreements are in accordance with EU and Member-State national laws. Council Directive 86/653/EEC establishes certain minimum standards of protection for self-employed commercial agents who sell or purchase goods on behalf of their principals. The Directive establishes the rights and obligations of the parties involved; the agents remuneration; and specifics on the termination of an agency contract, including the notice to be given and compensation to be paid to the agent. It is always sensible to have the proposed legal agreement reviewed by a local contracts lawyer. Austrade can provide a list of suitable lawyers for most major European markets. For more information see: eurlex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=31986L0653&model =guichett

Page 31

05.

Choosing the Right Marketing Model

This absence of restrictions on most forms of intra-EU trade makes the European Union an attractive single market for Australian companies. It is important to remember that the market is a differentiated one with quite different economic structures, consumer demand and even climate factors playing a role in how a product or service is accepted. A pan-European business strategy is necessary but individual market entry strategies should be considered for each country separately. Commitment to support and long-term presence in the market must be demonstrated. In many cases this will include establishing a direct presence or strategic alliance in Western Europe. European companies prefer to have local support rather than online support from other countries. Some European customers have the impression that European suppliers offer superior after-sale support, and the presence of a well-trained, well-supported local agent who can service equipment is important in closing a sale. For an Australian company to consider Europe it is critical that they realistically evaluate the resources they can commit and focus on priority markets rather than spreading their resources too thinly. While there is no one perfect model for all Australian companies it would be sensible to consider the following: Europe is more about trust, understanding and cultural compatibility Capability can be built over a short amount of time Large deals dont happen immediately, once a small deal is made, clients are willing to negotiate more services. It is difficult to change from indirect to direct exporting. Being present nearby is important to client comfort and circumventing language barriers. Be prepared to consider different engagement models depending on the needs of the client organisation. Explore models like joint ventures or involving European staff as these may be more amenable for cultural compatibility and client control.

It is easy after meeting several potential agents to go with the company where there was the strongest rapport developed. While this isnt necessarily wrong, take time to reflect whether this rapport is based on business fundamentals or their English fluency.

06.

Finding an Agent or Distributor

While there is no exact formula for identifying the right partner, here are some tips for identifying potential in-market partners: Visit trade show and conferences Talk with in-market trade associations Identify how competitors are marketed in the EU Identify products and services that are complimentary to your offering, to identify whether these companies or their local partners may be suitable partners.

Page 32

EU Agent Associations The International United Commercial Agents and Brokers Association (IUCAB) provide links to the various Agent organisations within Europe and provide online agent and distributor matching services for Germany, Sweden, Austria and Cyprus. For more information see: www.iucab.com/en/information/membership_list.php#uk www.come-into-contact.com EU Business Listings While nothing beats face to face contact with potential customers there is much research that can be done from Australia to assess the European market. Kompass System: www.kompass.com Kompass provides an extensive directory of products, contacts, and other information with 3 million companies listed. Companies are searchable by product or service, company name, or categories. General information for each company is provided, such as address, phone, fax, number of employees, capital, and whether they are a distributor, manufacturer, exporter, importer, etc. Euro Pages: www.europages.com Euro Pages, the European Business Directory, is a "business-to-business directory published in six languages and actively used in 33 European countries. You can conduct searches by country, industry, or company data. Hot Tip: Europe at your doorstep The majors in the European energy efficiency industry are in many cases already well-established in Australia. If part of the business strategy involves this type of partner, perhaps through licensing or strategic alliance then it is prudent to explore the Australian arm initially. While it makes strategic sense in most cases to work with the head office, in the medium term it may we worthwhile to approach their Australian subsidiary in order to build your network, build credibility and help to open doors internationally. Another potential example of this could be where the subsidiary purchases a product/service to integrate into its Australian service offering and then advocates this internally to be taken on globally. Note: a knockback from the Australian operations does not always mean there is no potential for collaboration globally. Company Qualification The European Business Register (EBR) is a network of National Business Registers and Information Providers from 26 European countries. The EBR provides easy access to each countrys official business register. The EBR can be used to retrieve official company information on over 20 million companies across Europe with a single user account. It is a useful tool to identify the relevant business register which can be approached directly. For more information see: www.ebr.org/section/2/index.html and www.globalbusinessregister.co.uk/home.shtml

Page 33

Section 7

Commercialisation and Venture Capital in Europe

01.

Collaboration as a Pathway to Market

Collaboration is an important pathway to market and an important feature of the European market is it willingness to invest in the development and commercialisation of new technology and solutions. As competition from low cost economies has threatened to erode the market share of European companies, many of them have placed an increased focus on innovation, customisation and technology to differentiate them in the global market. In a recent benchmarking study on innovation published in January 2010, Cap Gemini found that 6 out of the top 10 Innovation Countries were European. The ranking was as follows; USA, Germany, Sweden, UK, Singapore, South Korea, Switzerland, Denmark, Japan, Netherlands, Portugal and Spain. This needs to be understood in the context of a further report which shows that 8 out of the top 10 most globally open economies are in Europe. (Ernst & Young 2010 report Globalisation and the Changing World of Business) This report measures which countries are open to sourcing innovation internationally and shows that European industry is willing to invest wherever it finds excellence. The opportunities presented by the European market for Australian organisations looking to commercialise their innovations or find a market for newly developed technologies is outlined in this section.

02.

Corporate Venture Capital Funds

Of particular interest in the European market is the role of Corporate Venture Capital (VC) funds in financing new technologies. Unlike private equity groups these funds tend to take a longer term interest in technology start-ups, are often prepared to invest at an earlier stage of the commercialisation process, as well as, provide important access to end user customers through their global distribution networks. A typical example of such as a fund is Innogy Venture Capital GmbH which is part of the RWE energy company headquartered in Germany. Its focus is on achieving cost competitiveness of renewable energy technologies compared to conventional sources. Its particular focus is on: Smart power and energy efficiency o o Smart home, smart grid, and smart meter Conversion technology using waste heat

Thermal energy from solar and biomass Cooling energy from solar Fuel production from biomass Storage of electricity and heat energy

It is willing to finance ventures from seed funding to expansion capital and is prepared to be both lead investor or co-investor with a syndicate of other VC funds. Because of its involvement at the earlier stage of the investment process its investment is lower than many pure VC/private equity groups, averaging EUR3-9 million (AUD4.112.3m million), and its average length of investment is a little longer at 4-6 years.

Page 34

To date it has made 9 investments, including: Mantex Voith: ReVolt Stirling Heliateck Airec Quiet Revolution Topell Energy Ceram Hyo

For more information see: www.innogy-ventures.com/web/cms/en/477318/innogy-venture-capitalgmbh/portfolio/portfolio-companies/ Similar corporate VC funds are managed by Siemens, Bosch, E.On, Bayer and BASF to name just a few German examples. There are many others across Sweden (e.g. ABB), Netherlands (e.g. DSM) and France (e.g. Alcatel Lucent and Veolia). Engagement with these funds can provide an important path to market for early stage Australian technology groups. Austrades Investing in Cleantech Research Initiative In order to attract European investment into Australian research and innovation, Austrade Europe piloted the Invest in Research initiative in 2010-11. Through its network of corporate contacts Austrade identified 9 major European companies (such as Bosch, Veolia, EADS, Astra Zeneca etc.) which were prepared to consider early stage investments into Australia research and technologies. 15 Technology Commercialisation Offices from major universities participated from the Australian side. Through a series of video conferences Australian participants were provided with detailed insights into areas where European companies were looking for external solutions to address gaps in their development pipeline. As a result over 130 proposals for industrial collaboration were presented by the Australian universities of which over 30 were accepted for further discussion and review. The positive feedback received from the pilot from both European and Australian participants has led to the extension of the initiative. A specific Invest in Cleantech Research initiative will be conducted from October 2011May 2012 with a particular focus on smart grid/energy efficiency, water management for commercial buildings and solar energy. For the coming year research institutes and technology spins outs will also be able to participate. Spotlight on Bosch Bosch is a privately held company with EUR47 billion (AUD64.3 billion) in sales in 2010. Robert Bosch GmbH has an ownership structure that grants the Bosch group entrepreneurial flexibility allowing the companies executives to make long term decisions. Bosch addresses energy efficiency issues across a number of its divisions, solar energy, building technology and household appliances. Products range from energy saving cooling devices, modern heating systems to machine tools. Bosch: - Invests EUR3.8 billion (AUD5.2 billion) in research each year, - Has 34,500 research staff in 86 locations worldwide, - Files 15 patents on average each working day (third place worldwide). Spotlight on Veolia Veolia is a privately held company and reported EUR34.8 billion (AUD47.6 billion) in sales in 2010. It has over 315,000 employees in 77 countries worldwide. Veolia works across many areas however of most interest for this report is their work in environmental services and energy services.

Page 35

In February 2010, the French waste management group Veolia Environment announced the Veolia Innovation Accelerator program. This program is designed to help accelerate the development of innovative environmental technology through a partnership with the Veolia Cleantech Group and the worlds most innovative cleantech startups. This partnership opportunity may be interesting for companies wishing to enter the French/EU market with an international associate. The program focuses on: - Sustainable and green cities, - Energy generation and optimization, - Waste sorting, recycling and recovery, - Waste water, - Drinking water. For more information see: www.veolia.com/en/innovation/research-innovation/via/

0.3 Private Equity and Venture Capital in Europe

Europe has considerable strength in cleantech financing, especially in the area of private equity funding for clean energy infrastructure, where it is the dominant global financier. There are a number of VC funds that are targeting companies in the energy efficiency sector. The following VC companies each have over EUR200 million (AUD274 million) in funds for green technology of which energy efficiency is one of the key focus areas. Ambienta (Italian) www.ambientasgr.com/home/en Climate Change Capital (UK) www.climatechangecapital.com/private-equity.aspx Demeter Partners (French) www.demeter-partners.com Zouk Capital (UK) www.zouk.com/en Typically these firms look for a minority share in partnership with local VC companies and target an investment of between EUR10-20 million (AUD13.7-27.4 million). These private equity firms are more comfortable with European investments which they can easily and actively manage, consequently to attract their interest an Australian company would need to have products/services that suited their European strategy. Their investment criteria include the need to demonstrate proven technologies in a growing market segment with a clear path to profitability. They tend to seek an exit strategy within 4 years via Initial Public Offering or sale to another fund or private company. Case Study ZOUK Capital Zouk Capital, a London-based private equity and VC company, recently closed a EUR230 million (AUD315 million) fund targeting clean technology 15 percent higher than it had originally expected. This new fund (Cleantech Europe II fund) will invest in renewable energy, energy efficiency, water and waste companies. Zouk is looking to make investments between EUR10-20 million (AUD13.7-27.4 million) per company over the lifetime of a project. Rising demand for resources, security supply concerns, climate change and government support continue to drive a market for clean technology that was worth more than EUR70 billion (AUD96 billion) in investments last year, according to Zouk. Smart grids, which enable consumers of electricity to monitor their energy use, are of particular interest. While there are significant equity and VC funds available Zouks investment profile, which reflects the typical European based company, is to invest within the region. Therefore it is necessary for Australian companies looking to access finance to be present in the market through a joint venture or representative office to be able to more readily access funding.

Page 36

03.

European Government Research and Commercialisation Support

There is strong EU support for research and development into energy efficiency. The main source of this funding is th through the 7 Framework Program for EU Research and Technological Development (FP7) which has set aside over EUR32 billion (AUD44 billion) of the over EUR50 billion (AUD68 billion) in funds to support pan-European and international cooperation. A feature of this project is the collaboration between research institutes and industry and a strong participation by small to medium sized businesses as well as large corporations. Entry to this program is possible for Australian companies but is complex and requires advice and guidance. Groups such as FEAST (Foundation for European Australian Science and Technology) based in Canberra is well placed to assist with enquiries. In addition to funding via the EU each market has its own research funding programs designed to foster international cooperation. The Department of Industry, Innovation, Science and Research (DIISR) manages bilateral relationships with many of these institutions and has a range of support programs to support Australian engagement and cooperation. Large research institutes with a strong focus on building technologies and energy efficiency include: Center for Energy and Processes CEP (France) www.scep.ensmp.fr/ Fraunhofer Institute (Germany) www.fraunhofer.de/en/index.jsp German Airspace Research (Germany) www.dlr.de/en/desktopdefault.aspx/tabid-13/ IFP Energies Novelles (France) www.ifpenergiesnouvelles.fr/ Wuppertal Institute for Climate, Environment and Energy (Germany) www.wupperinst.org/en/the_wuppertal_institute/index.html

Page 37

Section 8

Standards and Regulatory Compliance in Europe

01.

Standards Organisations

Conformity Assessment is a mandatory step for the manufacturer in the process of complying with the relevant EU legislation. There are a number of ways it is undertaken, ranging from self-certification, production quality control system, to a full quality assurance system. Depending on the level of risk, the manufacture has some choice with regard to conformity assessment which depends on the level of risk involved in the use of their product. EU standards are often taken from international standards bodies such as the International Standards Organization (ISO). You can find conformity assessment bodies in individual Member State country in this list by the European Commission. The drafting of specific EU standards is handled by three European standards organizations: CENELEC, European Committee for Electro-technical Standardisation www.cenelec.eu ETSI, European Telecommunications Standards Institute www.etsi.org CEN, European Committee for Standardisation, handling all other standards www.cen.eu

ETSI gives away its individual standards at no charge on its website. Whereas CEN and CENELEC standards are sold by the individual member states standards bodies. For more information see: ec.europa.eu/enterprise/newapproach/nando/ The EU standard system has spread beyond the EU members to include countries seeking EU membership and other countries, like Australia, aiming for standardised rules and practices. This provides benefits to Australian companies in that the conformity testing for certain Australian products to be exported to Europe can be done in Australia. For more information see: www.innovation.gov.au/INDUSTRY/TRADEPOLICIES/MRA/Pages/ECAustMRA.aspx

02.

CE Marking and Product Certification

To sell products on the EC market (This is the EU as well as Norway, Liechtenstein and Iceland), exporters are required to apply CE marking whenever their product is covered by specific product legislation. The CE marking simplifies the control of regulated products. The manufacturer or their EU agent is required to issue a declaration of conformity with detailed information on the product. The product must be traceable to either the manufacturer or their EU representative. With the CE mark, products will be allowed to circulate freely within the EU. Independent certification bodies, known as notified bodies, have been officially accredited by competent national authorities to test and certify to EC requirements. In some situations this testing can be undertaken in Australia by Australian accredited bodies. The European Community-Australia Mutual Recognition Agreement enables conformity assessment of products and of manufacturers (testing, inspection and certification) intended for export to Europe. Following this agreement these test can be undertaken in Australia. This means compliance with the requirements of the relevant EC Directives can be established in Australia, and the CE marking applied to the product, prior to export. In this way, products can be placed on the EC market without further intervention by EC authorities.

Page 38

The mutual recognition agreements cover the following sectors: automotive products electromagnetic compatibility (EMC) low voltage electrical equipment telecommunications terminal equipment machinery medical devices pharmaceuticals pressure equipment

03.

Product Liability

Under the 1985 Directive on Liability of Defective Products, the producer is liable for damage caused by a defect in his product. The victim must prove the existence of the defect and a causal link between defect and injury. For more information see: ec.europa.eu/enterprise/policies/single-market-goods/product-liability/

04.

Product Safety

The General Product Safety Directive is to protect consumer health and safety by ensuring that manufacturers only place safe products on the market. It requires that the producer and distributor of a product notify the Commission in case of a problem and specifies provisions for a product recall. For more information see: ec.europa.eu/consumers/safety/prod_legis/index_en.htm

05.

Import Regulation

While the EU is a common market for trade of goods and services, member states do still have their own licensing requirements for some goods. To identify what requirements apply for the import of goods the Integrated Tariff of the Community, referred to as TARIC, shows the rules and tariffs applying to specific products being imported into the EU. For more information see: ec.europa.eu/taxation_customs/dds2/taric/taric_consultation.jsp?Lang=en To fill out customs documentation correctly and pay the correct duties and VAT it is critical to use the correct classification code. While it is possible to make an assessment of what classification code is appropriate, it is generally best practice to apply for a Binding Tariff Information (BTI) which is a legally binding decision on a classification code that applies for all EU member states. While a BTI can be sought in any member state for language simplicity it may be wise to consider undertaking this in the UK. For more information see: www.businesslink.gov.uk/bdotg/action/detail?itemId=1078053852&type=RESOURCES

Page 39

Section 9

Spotlight on Key European Markets for Energy Efficiency

01.

Czech Republic

The Czech Republic is geographically small, ten percent of the population, along with most of the large multinational, strong national companies and decision makers, are concentrated in the capital city of Prague. Established personal relationships are crucial, thus we recommend basing your market entry approach on finding and supporting a Czech partner, agent, or distributor. An agent or distributor based in Prague can offer good coverage of the entire country. Many companies will offer to represent your firm throughout Central Europe, but our experience is that one agent per country works best. In general, agents and distributors will expect exclusivity which should be tied to performance with a time limitation in the agent/distributor agreement with a clause that allows termination for non-performance. Good support and management of the agent-distributor relationship is crucial. It is important to gain good knowledge of the agentdistributors client base, work organization, plans, strategies and financial situation. Some distributors can be thinly capitalized and understaffed. Energy efficiency consultancy service firms should use local partners as their entry point into the market. Using a local partners facilities and staff will bring costs down to competitive levels and a local partners contacts will be crucial to developing the business.

It is generally not worth the effort and expense for small and medium sized companies to establish a local office in the Czech market. However it is interesting to note that the Czech Republic with its geographic location, somewhat lower cost base and multilingual staff is attracting some investors to establish offices there as their European hub.

Government Energy Efficiency Programs The key government departments are the Ministry of Industry and Trade (MIT) and the agency Czechinvest after abolition of the Czech Energy Agency in December 2007. At present, Czechinvest is responsible for preparation, realisation and consistent evaluation of the Operational Program Enterprise and Innovation (OPEI) 2008 2015 Eco-energy. The State Environmental Fund (SEF) under the Ministry of Environment operates the Operational Program Environment (2008 2015) and the Green to Savings Program to support greening of family houses. In 2009 the Green to Savings Program for residential housing commenced. It is financed from sold unused emission allowances and it is the largest Czech energy saving program. The program supports insulation of family houses, the replacement of environment unfriendly heating for low-emission biomass-fired boilers and efficient heat pumps, and the installations of these sources in new low-energy buildings, as well as construction of new houses in the passive energy standard. The Operational Program Enterprise and Innovation and Operational Program Environment are currently the most important measures supporting energy savings within industry and commercial property. They are EU funded programs and are to help adapt the Czech economy to meet the European environmental goals.

Page 40

Selling to Government As a member of the EU, the Czech Republic is subject to the rules of the GATT Agreement on Government Procurement. The Czech government's current procurement law requires public tenders for major government and government-financed procurements. Tenders are publicized in the local daily press, particularly Hospodarske Noviny (Economic News) and Mlada Fronta Dnes newspaper, as well as in the Obchodni vestnik (Trade Gazette) published by the Czech government. Major manufacturers of a particular product are usually notified directly. The period between calling and closing tenders is 180 days for internationally financed procurements. Australian companies bidding on Czech government tenders must have their products approved for the EU market. Australian companies that find local Czech partners for joint bids can compete in tenders for environmental services, engineering services, and financial and management consulting services. Bid bonds from 1-5 percent may be required for large-scale contracts. ESCO and Green IT The ESCO market in the Czech Republic is dominated by about 8 -10 experienced companies. These companies have been, and will continue to be, keen to access their share of the EUR5 billion (AUD6.84 billion) EU funding offered via the Operational program environment. The EU funds together with an addition EUR300 million (AUD410 million) from the national budget are to be spent on ecologic projects. The program focuses on areas such as: water management and reduction of flood risks (40 percent of the budget) improvement of air quality and reduction of emissions sustainable use of energy resources improvement of waste management and removal of old environmental burdens limitation of industrial pollution improvement of state nature and landscape development of infrastructure for environmental education, consultancy and awareness technical assistance

The Czech Republic ESCOs work in close cooperation with regional governments and individual councils. They deliver complex project solutions including: drawing up project documents and repayment schedules, implementing energy saving measures and selecting specialist subcontractors. These companies have expressed an interest in cooperation on innovative projects that can assist them improve their position in the market. The overall Czech IT market is forecast to increase from USD5 billion (AUD4.7 billion) in 2011 to around USD6.4 billion (AUD6.1 billion) in 2015. Larger and small enterprises, as well as government institutions will have to invest in IT in order to meet international standards following EU accession, this concerns green IT sector in great extent. Rapid technology adoption rate and development of services market, together with rising incomes and growing success of small businesses will boost the market. Moreover, both foreign and domestic firms are eligible for a package of investment incentives, including relief from corporate taxes for up to 10 years and job-creation grants. The traditional areas where private and public companies were trying to cut costs cant be used anymore without a significant negative impact on employees or customers, but the area of energy still represents the most feasible way to significantly save or improve competitiveness. Deploying new and modern technologies, especially those considered green, i.e. environmentally friendly, can very successfully streamline their business costs. Tips for Doing Business It is recommended that you conduct regular rounds of face to face meetings and maintain frequent telephone, fax and email contact between visits.

Page 41

Having a sales force that speaks the local language is essential to success in the market. Ideally product literature should be in the local member language. Dress conservatively for official meetings. Use surnames until you are invited to use first names. Ask if a meeting can be conducted in English and if not provide an interpreter (this may be useful even though English is usually spoken in larger and international companies). Be sensitive to the fact that the older generation tends to be quite conservative.

Links and Industry Contacts When evaluating the Czech market, Australian energy efficiency consultancy companies should take into consideration information that is available from the following agencies and governmental organizations. These agencies play a very important role in the market together with a few market leading private enterprises. It is possible to contact them directly, search their websites or ask specific questions via Austrades representative in Prague. Association of Energy Auditors - Asociace energetickych auditoru (www.aea.cz - information in Czech only) The Association of Energy Auditors lists all certified auditors, all relevant legislation as well as training and other support information. Energy Regulatory Office (www.eru.cz/dias-read_article.php?articleId=331 some information translated into English) The Energy Regulatory Office is the national regulatory authority in the energy sector. Its main tasks are defined as the support of economic competition, the support of the use of renewable and secondary energy sources and the protection of consumers' interests in the areas of the energy sector where competition is not feasible. Electricity Market Operator - OTE a.s. (www.ote-cr.cz/ - some information available in English) The Electricity Market Operator was established by the Ministry of Industry and Trade as a joint stock company. Its tasks and responsibilities are based on energy law. Besides tasks related to the electricity market the OTE is also the administrator of the Czech registry for greenhouse gas allowances trading. Ministry of Industry and Trade (www.mpo.cz information available in English) The Ministry (together with the Ministry of Environment) is responsible for the promotion of energy efficiency and renewable energy sources. It also has the task of evaluating state programs financial subsidies for the implementation of energy saving equipment and the reduction of the negative environmental impact of energy production, and it is the implementation agency for the EU Structural Funds. In the Czech Republic only a certified energy auditor can perform an energy audit. They are registered with the Ministry of Industry and Trade. Ministry of the Environment (www.mzp.cz information available in English) The Ministry of the Environment is responsible for the allocation of funds through the State Environmental Fund and for the State program which supports renewable energy sources. State Energy Inspection (www.cr-sei.cz/sei_en.htm - some information available in English) The State Energy Inspection Board is the inspection body to supervise the activities in the energy sectors. Its responsibilities are defined in the Energy Act.

Page 42

02.

France

Frances energy policies reflect a strong commitment to energy efficiency and security within industry, household and transport as well as an increased focus on inter-regional cooperation regarding energy supply and access. National agencies such as the ADEME have been placed in charge of pursuing these goals and implementing policies. State, regional and civil society members all work together to create energy efficient programs and oversee achievement. Ambitious goals were set in the Grenelle de lEnvironnement program of 2007, such as a 23 percent target usage of renewable energy sources in 2020. In addition, in 2009 France adopted a plan to improve energy efficiency within the agricultural sector. This plan is designed to support the Grenelle de lEnvironnement goal of 30 percent of agricultural exploitations using low-energy consumption by 2013. One of the main drivers of energy efficiency improvements in France has been discussions around an Emissions Trading Scheme (ETS), placing a quota on energy-intensive branches and the support of combined heat and power generation through a feed-in tariff dependant on capacity, natural gas price or operating hours. France has also adopted a National Energy Efficiency Action Plan 2008 (NEEAP) which sets out to save at least 9 percent in energy consumption between 2008 and 2016, within the buildings, transport and small industries sectors (not including those covered under the ETS). Despite these ambitious goals Frances energy consumption remains higher than the European Union average (20 percent higher in 2009). Currently 40 percent of energy consumption is from nuclear sources, 30 percent is from oil, though this has been steadily decreasing since 1990, and natural gas remains steady at 15 percent. The use of coal has halved since 1990 (4 percent in 2009) and the use of biomass remains low (6 percent in 2009). Green Building The French government is focused on reducing energy use in both public and private buildings. Buildings accounted for 42.5 percent of total energy consumption in France in 2007 with housing accounting for 27 percent of the total. On top of this, buildings and housing are responsible for the generation of 18 percent of Frances greenhouse gas emissions. Consequently the government has allocated approximately 50 percent of the funds (EUR208 billion AUD285 billion) from the New Green Deal (government stimulus package) to help renovate high energy use buildings and build energy-positive buildings. This sector is therefore positioned to deliver significant and immediate energy saving. The Grenelle de lEnvironnement laid out concrete targets, measures and incentives with regards to the construction of new buildings and the renovation of existing buildings. Targets for existing buildings include: State buildings: all public buildings will be renovated within five years. Social residential: public-private partnerships will be explored to identify renovation priorities, lead-times and financial negotiations.

Targets for new buildings include: New buildings must consume less energy than 50 kWk per m per year by 2012, and become energy neutral or positive by 2020. Energy consumption of commercial buildings should be reduced by 20 percent within the next 5 years, and within residential buildings by 12 percent. Private buildings: a need for substantial financial incentives has been acknowledged, which could include tax credits, tax breaks, carbon loans based on the German system and innovative bank financing products based on the energy saving potential of a project.

Page 43

The Foundation Btiment Energie is an association that provides financial support for research projects aimed at reducing the consumption of energy (amongst other aims). For additional information and a list of tenders see www.batiment-energie.org/ information available in French only. Smart Grids The smart grid is a priority for France. France is ranked 9th in the world in terms of planned investment into smart grids with approximately EUR183 million (AUD250 million) of planned government expenditure. The French government has also announced that 35 million smart grids will be installed by 2017. The smart grid market in France is dominated by large public operators such as EDF and its subsidiary ERDF as well as by world leading companies in the electrical equipment sector like Schneider Electric, Alstom and Legrand. Potential Growth Areas Real time consumption steering software: electricity operators offer consumers the chance to reduce the power or energy available to them at peak times in exchange for preferential tariffs. This facilitates the management of energy distribution for suppliers and consumption for consumers at peak times. Real time follow-up of building movements and occupancy to control room functions (lights, shutters, ventilation). Building energy management. Meter communication and data distribution. Smart grids chips manufacturing.

Tips for Doing Business French companies are interested in long-term partnerships. Therefore, once business partnerships are established they need to be maintained with regular visits to France that will ensure continued collaboration. The most important characteristics of French business behaviour are its emphasis on courtesy, and a certain formality. The French are formal in their business dealings and are generally not receptive to a hard-sell approach. Although many business people in France speak English, a considerable advantage can be gained if one can communicate in French during business dealings. Before meeting we recommend that you ensure the person you are dealing with is a confident English speaker and if not that you have a translator on hand. In business there are some established protocols: Titles (Dr, Professor, Mr, Mrs etc.) should be used both in correspondence and in face-to-face meetings. Business contacts are not normally addressed on a first name basis. Contracts should be coherent, thorough, and where possible, brief. Do not schedule business meetings in August (summer vacation) or workdays adjacent to public holidays. Respecting appointment schedules is important, along with prompt correspondence whether by mail or fax. Not surprisingly, in a country renowned for its fashion industry, style of dress is very important in the business world. For men, office and corporate wear is formal, consisting of suit and tie. Fashionable semiconservative wear is considered appropriate for women. Lunch is an integral part of the day and business discussions during a meal are common.

Links and Industry Contacts French Environment and Energy Management Agency ADEME (www.ademe.fr information available in English)

Page 44

The French Environment and Energy Management Agency mission is to encourage, supervise, coordinate, facilitate and undertake operations with the aim of protecting the environment and managing energy. The ADEME website also has a link to the appels propositions (calls for proposals) which lists projects relating to the environment or energy use. For more information see: www2.ademe.fr/servlet/KBaseShow?sort=1&cid=96&m=3&catid=24680&nocache=yes. Please note that the information is only available in French. French Environment Round Table Discussions Grenelle de lEnvironnement (www.legrenelle-environnement.fr some information available in English) French efforts to preserve and monitor the condition of the environment are reinforced by the Grenelle de lEnvironnement, a national multi-party round table focused on developing a roadmap for the environment, sustainable development and planning through 15 to 20 sets of express recommendations. Amongst these recommendations are additional eco-responsible public purchasing procedures. French Ministry for Ecology, Energy, Sustainable Development and Town and Country Planning (www.developpement-durable.gouv.fr information available in French only) The French Ministry for Ecology, Energy, Sustainable Development and Town and Country Planning is responsible for policy relating to Energy and Climate issues, building and lodgement as well as sustainable development amongst other duties. International Energy Agency IEA (www.iea.org/textbase/pm/?mode=pm&action=view&country=France information available in English) The International Energy Agency has a database which lists all the key energy efficiency policies in France. Le Moniteur (www.lemoniteur.fr/ - information available in French only) This website lists most public projects that are open to proposals/bids. Although this website is not specifically for energy efficiency or clean technology in general there are projects listed on this website within the energy efficiency area.

Page 45

Q&A with Herv Suty from Veolia Environment

What are the major issues concerning Energy Efficiency in the coming 5 years? I think electricity use will remain a key focus for the industry in the next 5 years. Areas of interest will include smart grids, electric vehicles - due to changes in transportation modes, urban planning and decentralised energy use - for example, electrical power storage mediums such as hydrogen. How much awareness is there on a consumer and company level to save energy? I would define energy saving awareness as CO2 emissions awareness. We are seeing more and more CO2 emissions and once we have an established price for these emissions everyone will become more conscious of their energy use. Businesses will need to develop new business models. What are the major growth areas for your business in Europe?

Waste is not just rubbish but more so raw material for other products. Consequently, one of the high growth areas in our business is the waste treatment sector. Following concerns about CO2 emissions, energy requirements are a key driver for development in Southern European countries and should become a driver in Central European countries, too. The growth in the water sector is reasonably moderate as there has been a reduction in the consumption of drinking water, however, there is and will be much to do in the area of waste water treatment; especially when we consider the emerging parameters of the European Water Directive. The transportation area remains promising even though there have been some difficulties in recent times. What is/are the technology/services/products reaching the market? New sensors and system management tools, technology that reduces CO2 emissions and/or CO2 footprints, automatic waste sorting products, products that assist recovery of metal from waste, thermal or biological processes that convert biomass into energy, low energy desalination trains, intermodal transport, information technology applications for customers, as well as hybrid vehicles for urban transport or waste handling. What is the new technology coming through that is exciting European customers? This varies between the sectors of our activities. The global value of compounds and decentralised energy systems are exciting for our European customers together with technology which will save CO2 emissions. Information technology and global systems management is another field of great interest. Who are the major customers / early adopters in the market? Municipal governments that want to have sustainable development projects in their cities that are internationally recognised, as well as companies that have a strong commitment to environmental protection. What are the common mistakes you see made by companies entering the European market? The European market is a melting pot of different cultures. Countries have different ways of managing services due to differences in history, politics, rules and social and industrial networks. Very often foreign countries dont integrate enough; they lack a comprehensive approach which meets the needs and expectations of each country. Which players or events in the market can help give me additional inside information on the European market? There are international forums and conferences held in every sector in which we are active. Market studies by consulting companies can be purchased online, and there are also professional associations at local and international level.

Herv Suty is the Manager of the R&D Centres of Veolia Environment

Page 46

03.

Germany

Germany is a free enterprise market with no business sectors exclusively dominated by the State. It is a cosmopolitan market where 22,000 foreign businesses are located including many of the 500 largest companies in the world. Germany is one of the top ranked countries internationally in regards to achieved energy efficiency. According to the International Energy Agency (IEA), Germany and Japan are well ahead of other industrial nations in implementing energy efficiency solutions. The German Trade and Investment industry estimate the German market at EUR67 billion (AUD92 billion), making it more than 10 percent of the worlds market for energy efficiency. The size of the German market, the high uptake of energy efficiency solutions and strong government support programs makes Germany one of the most attractive global markets for Australian companies looking to grow their business internationally. Germanys recent decision to scrap nuclear power will result in an increased emphasis on energy efficiency beyond already substantial energy efficiency goals. The McKinsey report `Strategic Competitive Factor Energy` in April 2009 outlines significant energy saving potential for German companies and households which is equivalent to approximately 25 percent of the overall energy costs in Germany. According to the study, EUR22 billion (AUD30 billion) could be saved in transportation and logistics, EUR21 billion (AUD29 billion) in buildings and EUR10 billion (AUD13.7 billion) in industrial production. Germany offers public loan schemes for companies and SMEs from the industry and service sector investing in energy-efficient technologies. There is also a wide range of loan and credit based-programs such as the expanded German CO2 Building Retrofit Program of the Reconstruction Loan Corporation that Austrade staff can help you to track and understand how they can be applied to support the take up of your business solutions.

The German market has acknowledged the need for cross-sectoral co-operation models in the area of research and strategic alliances to commercialise new technologies, for example joint research/strategic alliances with German research institutes or other players in the market such as utilities, energy suppliers, car manufacturers etc. This provides excellent opportunities for Australian companies looking to establish a market for their technology.

Foreign companies employ 2.7 million people. Germany provides developed, sophisticated infrastructure to support business in the areas of logistics, telecommunications, qualified labour, research and development and access to markets. Green Building

Forty percent of the total energy consumption in Germany comes from energy consumption in buildings of which 85 percent is for heat and 15 percent for electric power. According to McKinsey, there is energy saving potential of EUR21 billion (AUD29 billion) in buildings with over 70 percent savings possible in private households.

Approximately 700,000 houses and apartments are refurbished each year in Germany; however despite the longterm lower energy costs only 300,000 of these include fitting-out with energy-saving technology. Heat insulation

Page 47

and optimised heating systems provide the greatest savings for refurbishments, whereas CHP and heat pumps tend to be more suitable for new buildings. In the context of Europe, Germany is one of the leading countries in Europe in implementing the European Performance of Buildings Directive and is recognised for its expertise and leadership in green building technologies. As an example, Germany has developed clusters of sustainable biofuel villages to effectively use and store electricity with energy-efficient (passive) houses being an integral part for the success of these initiatives. Germany is one of the leading countries in implementing the European Performance of Buildings Directive in Europe. The reason for the success and leadership in green building technologies and markets is the penetration of awareness as early as a decade ago. All new homes built in Germany after January 1, 2009 are required to include a space heating system fuelled by wood pellets or solar thermal energy. According to Renewable Energy World, most German homeowners are expected to comply with the Renewable Energy Heating Law (Erneuerbare-Energien-Waermegesetz) by installing a solar thermal heating system. The law requires the area of solar thermal collectors to be at least 4 percent of the homes area. Potential Growth Areas: Advanced high-tech insulation materials. Building control systems. Energy efficient air conditioning and heat exchanging technologies. Smart metering devices. Renewable energy equipment (e.g. heat pumps, solar thermal panels).

Smart Grids Germany demonstrates a large demand for building automation and control and energy efficiency products. From 2010 network operators are obliged to install cost neutral smart meters for electricity and gas in new buildings as well as when completing refurbishments. The measuring market has been opened in Germany with the law MessZV, which obliges the energy suppliers to publish data on a specific timeframe as requested by the customer (e.g. monthly, quarterly, half a year). As of 30 December 2010 they are also required to offer a tariff, which encourages consumers to use energy efficiently or to manage their electricity consumption, especially with tariffs according to time of day or according to the overall energy consumption. This is the first step in Germany to respond to an EU-Directive whereby 80 percent of all households shall have a smart meter by 2020. Examples of smart meters currently available in Germany can be seen here www.enbw.com/stromzaehler/ or www.yellostrom.de/privatkunden/sparzaehler/index.html. These policies have created a large market in Germany. According to experts this would mean 42 million electricity meters and 22 million gas meters would be installed between 2010 and 2022. The energy supplier E.On has calculated that the network operators will need to invest up to EUR13 billion (AUD18 billion) for the infrastructure for smart metering including for the communication between meter and operator and for the ICT to evaluate the data. (Source: FAZ.net, Dem schwarzen Stromzhler schlagt die Stunde) The German Federal Network Agency still needs to decide on standard technical requirements which have led to uncertainty in the market. Experts expect that smart meters will take off in 2012 based on experiences in Sweden and Italy. Tips for Doing Business German business people are experienced in conducting international business and receptive to well-planned approaches, which demonstrate a potential commercial benefit to their companies. While broadly similar to

Page 48

Australian business practice the German approach has a higher emphasis on order, hierarchy and formality. A planned approach well in advance is highly recommended. Trade fairs are a key part of business in Germany. Around two-thirds of the worlds key international trade fairs are held in Germany, and the country operates four of the five largest trade fairgrounds in the world. In business there are equally some established protocols: German people are conscious of hierarchy and it is expected that you will deal with appropriate levels of seniority. Provide at least six weeks notice for senior executive level meetings. Frame the meeting with an agenda, short personal bio or CV, company profile and product literature. English is widely spoken but it is courteous to check and establish whether English will be acceptable. Arrange translation as appropriate. In any case, speak clearly and slowly, recognising English is most likely a second language to your host. Understand your contact company characteristics, strategic directions, needs. It is usual that company representatives address each other by their surname. Wait to be invited to use first names. Business dress is suit and tie. Casual dress would assume a jacket and tie. Punctuality is very important. If you are running late for a meeting, call ahead to advise giving as much notice as possible.

The peak summer holiday months of July and August are difficult times to arrange meetings. This is especially true when organising a program with multiple contacts, as school holidays vary across Germany and extended periods of leave at this time are common. In addition, many companies shut down over the Christmas and New Year period between 24 December and 2 January. Links and Industry Contacts E-Energy, an initiative of the Federal Ministry of Economics and Technology (www.e-energy.de/en/ - information available in English) The E-Energy program is funded by the Federal Ministry of Economics and Technology with its primary goal being to create E-Energy model regions that demonstrate how ICT can best be used to enhance efficiency of power supply and supply security. Federal Association of the German Energy and Water Industry - Energie und Wasserwirtschaft (BDEW) (www.bdew.de some information available in English) The federal association of the German energy and water industry is an association which represents the interests of many water supply and wastewater disposal companies in Germany. Federal Association of Power-Heating Units (www.bkwk.de/ - information available in German only) The federal association of power-heating units represents the interests of many heating technology companies in Germany. Federal Ministry of Environment (www.bmu.de some information available in English) The federal Ministry of the Environment creates government environmental policy and helps educate the public about environmental issues. Federal Ministry of Transport, Building and Urban Development (www.bmvbs.de some information available in English)

Page 49

The federal Ministry of Transport, Building and Urban Development create public policy in the areas of transport and mobility, building and housing as well as urban and rural development. German Energy Agency (www.dena.de some information available in English) The German energy agency provides information about new and ongoing projects in the areas of building, electricity, mobility, renewable energy and energy systems.

Page 50

Q&A with Peter Wilson from BOLLES+WILSON

What are the major issues concerning Energy Efficiency / Green Building in Germany in the coming 5 years? Under the global umbrella of reducing CO2 emissions Germany is politically and in everyday practice pursuing strategies that will alleviate the current dependence on fossil fuels and on atomic energy. A further drive to reduce energy consumption has spotlighted domestic consumption, a parallel questioning of industrial or mobility energy consumption seems politically less expedient. The current ambition is to go beyond Passive House standards and to achieve a 'Plus Energy House'. The DGNB (German Sustainable Building Council) code defines this standard and in this sense is a German market specific version of the international LEED (Leadership in Energy and Environmental Design) certification. As yet there is no certification procedure for 'total life-cycle' assessment of buildings. This is certainly a future field of endeavour. How much awareness is there on a consumer and company level to save energy? Is this changing?

Peter Wilson is a partner of BOLLES+WILSON architectural firm Photo Thomas Rabsch

Certainly and there are changes underway. These changes are due to increasing uncertainty in relation to energy prices and Government subsidies for energy efficiency products. What is the new technology coming to Europe? Renewable energy technology (wind and solar) is making great advances and Germany is a traditional exporter of high end solid and durable machines as well as knowhow. In the field of architecture one hears a lot about intelligent buildings, the counter argument is that no building can be more intelligent than its 'hausmeister' (property manager) or even that todays 'high- tech' is tomorrows 'dead-tech'. There is in fact a growing ambition for low-tech, long lasting solutions such as, thick energy retaining walls, fewer windows on northern facades where heat loss is greatest or adding effective sun screening on southern facades. Who are the early adopters in the EU? Where are they and what are their drivers? The 'light bulb holocaust' of which Australia was a leading protagonist is currently underway in Europe (albeit with growing reservation that 'energy saving lights' come with dangerously high mercury content). Investment and Real Estate Funds are great believers in certification, which means that in order to secure finance for new buildings new energy standards must be adopted. Political lobbying by particular industries (predominantly the glass and thermal insulation/chemical industries) has had a major influence on new European regulations. Buildings are now required to wear an overcoat of 30cm insulation and to have fewer opening windows (often triple glazed). To comply with current Passive House standards it is now necessary to mechanically ventilate. This (more technological) philosophy is vehemently questioned by the more creative thinkers in the field. Even some public clients (for example the Office of Public Works in Luxembourg for whom we [BOLLES+WILSON] are currently working on a project for the Luxembourg National Library) are prepared to circumvent the high-tech, lobbyist friendly strategies, legislated in Brussels, in favour of low-tech, thick wall (traditional) answers to energy saving. What are the major growth areas for your (BOLLES+WILSONs) activities in Europe? Sustainability in our opinion is not simply a question of material and technical standards. A building which delivers an atmospheric and usable comfort is respected and well maintained by its users, which guaranties a longer life for

Page 51

a structure. A building which serves its users and adapts to evolving uses will last centuries. A building whose useful life is only 20 years is unsustainable. This qualitative facet of architecture cannot be legislated and consequently it is for us to manage. The same philosophy applies to Urban planning which is a major growth field for BOLLES+WILSON. We are working in a number of European countries on the composition of qualitative and atmospheric urban districts. What are the common mistakes you see made by companies entering the European Market? A familiarity with local cultures, customs and legal codes is essential. A local 'hand-holder' is, from our experience, a good door-opener. It is necessary not only to have technical skills but also to, in a certain sense, mythologise the product. Which events in the market could help give me additional inside information on the European market? In terms of real-estate and development projects - MIPIM and Expo-Real are the principle trade shows. In terms of sustainable technology and building products - Contract World is an important trade fair for architecture and interior design and Light+Building is an important exhibition for architecture, technology and lighting in Germany.

Page 52

Q&A with Simon Girntke from Drees & Sommer GmbH on the Deutsche Bank Towers Redevelopment
What are the major issues concerning Energy Efficiency in Buildings in Europe in the coming 5 years? One of the biggest challenges is the development and calibration of building management systems which enable all the new technologies and solutions being developed to be integrated and managed effectively within one system that meets the environmental performance objectives of the building as it was designed. In the New Deutsche Bank Towers a new customised BMS was developed because the off the shelf solutions were not able to deliver the levels of integration and cross referencing of technologies needed. For example the building enables the tenants to exert a higher than normal control of the operation of the building such as the ability to individually open every second window to let in fresh air. This requires the BMS to first Deutsche Bank consider the wind speed outside the window and if there is any smoke or fire alerts. The Towers air conditioning system also has to detect if opening the window would reduce energy Redevelopment efficiency (by letting in too much heat for example) and if so, turn off the green light at the switch as a visual reminder to the person operating the window that this action is not energy effective at this moment. It also has to be programed to automatically close the window after 30 minutes if it is not energy effective. What is the new technology coming through that is exciting European customers? For leading edge developments like the New Deutsche Bank Towers the ability to provide individual control to occupants whilst maintaining the overall energy efficiency outcomes is a key deliverable because it ensures good operational efficiency and support from the Deutsche Bank staff. This has been achieved through individual controls for the windows, lighting and heating for small groups of 4-6 staff around the office. Such controls are managed within set parameters which are sufficient to improve individual quality of the environment but stay within the energy footprint of the building. Some examples include: The ability to manually raise the level of lighting set for an area but if the area is unoccupied for more than 5 minutes the lights are turned off. The ability to adjust the temperature of an area higher or lower. The ability to manually open individual windows to let in fresh air. However if the open window is not energy effective it will automatically close after 30 minutes.

Other new areas of technology include: Solar thermal technologies to provide hot water (e.g. for dishwashers in restaurants) and renewable energy for buildings where there is a suitable area of exposed surface on the building exterior. Systems to store the heat (and cold) captured from various applications and then use it to feed other energy needs (e.g. capture the heat generated by the cooling system and use it to heat other parts of the building). The Triple glazing of the entire faade of the building over the previous concrete faade has not only improved the insulation of the entire building significantly, but has maintained the functioning thermal mass that assist in keeping the entire building at a constant temperature year round.

How much awareness is there on a company level to save energy? Is this changing? Deutsche Bank is seeking to achieve a carbon neutral status by 2013. The refurbishment of the towers served as a beacon and had direct Board Member sponsorship. Companies are interested in saving energy and many have an environmental sustainability and carbon policy for their operations. They are less interested in the specific technologies deployed than in the accreditation that the

Page 53

buildings receive. This means it is important that specific solutions are marketed to the architects and project management groups overseeing the project. Where there is an owner occupier situation such as with the Deutsche Bank Towers it is easier to directly present technologies and discussion solutions with the company but in most cases a new development need to address the different cost and benefit issues being considered by the owner and the occupier and bring these together. In these cases there is limited opportunity for consultation with the end user and the solutions are driven primarily by cost and efficiency. Who are the early adopters in the EU and what are their drivers? The early adopters are large corporates which have made a commitment to environmental sustainability. They are driving demand for green building and energy efficient solutions. There are programs for private residents in areas such as solar energy which are also stimulating market demand in some areas. Generally it is legislative drivers around new building requirements for new buildings or refurbishments which are driving the market. How is/are the technology/services/products reaching the market? Technology and solutions are being integrated into new building designs by architects and commercial property development groups (and by companies property management unit for refurbishments). These groups are given parameters to work within and seek efficient, cost effective and complementary solutions which will deliver on the customer requirements. A growing trend is the need for individual solution providers to work in partnership with other suppliers to develop integrated solutions. For example if back lighting is sought for some public areas the lighting provider may need to work with the provider of the glass, behind which the lighting will sit, to address design requirements. Simon Girntke is a Project Manager at Drees& Sommer GmbH

Page 54

04. Italy
Italy is second in the world for solar photovoltaics (PV) installations and third in Europe by number of smart grid projects underway. Italy is a member of the IEA International Energy Agency. Italy established the Energy Efficiency Technical Unit (UTEE) in December 2009. UTEE provides technical support to key actors involved in energy efficiency and seek to improve the national energy efficiency strategy. The Italian energy efficiency strategy involves two government action plans: 1. The Renewable Sources Action Plan (PAN) launched in June 2010 aims at increasing the generation of energy from renewable sources by 2020 for power and transport uses; 2. The new Energy Efficiency Action Plan (PAEE) launched in July 2011 hopes to lead to increased national energy efficiency measures. Italy has surpassed the energy efficiency objective set by the previous Energy Efficiency Action Plan between 2007 and 2010 by 34 percent, mostly due to tax incentives for the restoration of buildings. The latest PAEE extends to new industry sectors, such as power generation and distribution, covering both regional and local governments. The IEA noted that as part of the EU Energy Performance of Buildings Directive, Italy has established the National Guidelines for Energy Certification Scheme, which includes a package of instruments aimed at harmonising the application of measures across levels of government. Italys draft extraordinary plan for energy efficiency and energy saving seeks to achieve more effective coordination between key actors, strong private-public partnerships, simplified national procedures, extended technical support and new fiscal mechanisms. Italys White Certificate Scheme introduced in 2005 rewards the installation of energy efficient technologies and has led to energy savings of around 5 million tons of oil, compared with the target of 3.2 million tons of oil. As a result of the scheme consumers saved 6 to 15 times more than the cost of the incentives (for each unit of energy saved). Schemes and incentives are currently being reviewed under the umbrella of a new government budget. Green build The Italian building industry represents approximately 14.5 percent of GDP and its estimated that the green building sector alone generates approximately EUR12 billion (AUD16.4 billion). CO2 emissions produced by housing in Italy are high at around 30 percent. Existing stock of non-green buildings represents a challenge to the reduction of emissions, especially given the reliance on fossil fuel generated energy to regulate internal comfort levels. Significant opportunities exist in Italy in green building retrofit. The trend towards green building in Italy is growing. Italy has adopted the independent certification system LEED (Leadership in Energy and Environmental Design) which is strongly promoted by the Green Building Council of Italy. The latest large scale urban projects in Milan are all LEED certified. Growth in the Italian green building market is being driven by the increased number of tenders in the building sector incorporating sustainability criteria and the implementation of EU directives which are being driven by Italian national, regional and local governments with generous incentives and rebates. There are opportunities in Italy for green building in: Energy efficient lighting Refitting of windows Better building management systems Lighting and heating automation

Page 55

Building control systems Energy efficient air conditioning and heat exchange technologies Smart metering devices

There is already competition in these sectors however there is a significant gap of/opportunity for products which have a high proportion of recycled materials and those which certify both the amount of recycled material and the CO2 footprint of the product. Photovoltaic (PV) New statistics by G.S.E. (Italian Government Authority of Power Services) show that Italy is now the second nation in the world for solar photovoltaic installations. Italy passed the 7 GW mark overtaking both Spain and Japan in 2011. Italy is close to grid parity (economic viability without incentives) with 250,000 active photovoltaic plants, a total of 8600 MW installed and a total industry turnover of EUR10 billion (AUD13.7 billion). Costs decreased by 25 percent during the first half of 2011 and the growth of the industry exceeded the demand. Puglia, Lombardia and Emilia Romagna are the top 3 regions in terms of number of active photovoltaic plants. In May 2011 the Italian Government launched the 4 Energy Incentive Scheme (Conto Energia). The scheme is valued at an estimated EUR838 million (AUD1.1 billion). To date the G.S.E.s National Register has received approximately 5,000 applications for big size photovoltaic plants above 1MW, with a total capacity of 6,000 MW. Feed-in-tariffs are available for plants above 1 MW only when registered, while small-size plants do not require registration to receive this benefit. Interestingly small size PV plants are booming according to the latest report by the United Nations Environment Program. Following the ban against nuclear power and the launch of the 4 Energy Incentive Scheme, the Italian Government will present the new National Energy Strategy in November 2011 at the national Energy Conference. The new strategy is also expected to ensure that the Italian incentive schemes are consistent with other EU countries and will use Germany as the main point of reference. In the interim, the Italian PV market is attracting overseas investment, from the U.S. and other EU countries, to build medium size PV plants. The Italian PV market attracts 62 percent of the total Foreign Direct Investment in the Italian cleantech market. Smart Grids The most recent Smart Grid Projects in Europe report, released by the European Joint Research Centre, notes that Italy is the European country leading investment in smart meters. Italy is 3 by number of smart grid projects underway (5.5 percent of the total 219 projects) behind Denmark (22 percent) and Germany (11 percent) and first in terms of EU funds secured (55 percent of the total EUR5.5 billion AUD7.5 billion). In addition, Italy is ranked first in Europe in terms of the number of smart power meters installed. Interestingly majority of the existing smart grid projects focus on cost reduction of power distribution and only a few involve R&D. In Italy there is room for both expanding the economic investment and expanding the R&D focus. Tips for doing business Italians generally dress well and conservative attire (suit and tie) is recommended for business meetings. Most business people speak English, however, it is recommended to verify this prior to a meeting and arrange the presence of an interpreter if required. Italians are formal in their address you should always address someone using their surname, not their first name. Titles are very important in Italy. It is best to find out the persons title before meeting with them,
rd th th

Page 56

you will impress an Italian by using the correct form of address. Anyone with a degree is addressed as dottore for male and dottoressa for females. So Mr Rossi, a general manager, will be dottor Rossi. Italians often run late so do not be offended if your host keeps you waiting around 10 minutes. We suggest however you are on time. Traffic congestion can cause significant delays especially in larger cities. It is therefore recommended to allow generous time for ground transport. Business visits in July and August are strongly discouraged as this is the Italian Summer and most people take their vacations at this time (please note many companies will close during Summer). Good food and drink are always appreciated, but Italians generally drink alcohol only at mealtimes. Italy is price-conscious and competitive, so do as much preparation as possible before visiting Italy and send detailed company information in advance. Italian business people tend to minimise commercial risk as much as possible and generally ask for a large amount of information to corroborate a decision and make progress on a project. Quick responses and prompt follow-up may not be forthcoming from Italian contacts, but are appreciated from Australian contacts. Italian contacts do not usually send interim responses. Normally they communicate only when something actually happens and/or a concrete opportunity arises. When writing figures Italians invert commas and decimal points e.g. 1,5 percent and ITL2.300.000.

Links and Industry Contacts APER Association of Producers of Power from Renewable Energy (www.webaper.it) Link to Report of Renewable Energy in Italy by APER (Italian language only www.webaper.it/index.asp?idCategoria=3&idSottoCategoria=18&idsottopagina=1757) ASSOSOLARE National Association of the Photovoltaic Industry (www.assosolare.org/) ENEA - Department for Research on Renewable Energy Sources (old.enea.it/com/ingl/New_ingl/research/energy/RenewableEnergySources.html) ENEA - Italian National agency for new technologies, Energy and sustainable economic development (old.enea.it/com/ingl/default.htm) Green Building Council Italy (www.gbcitalia.org/) G.S.E. - Authority for Energy Services (www.gse.it/Eng/Pagine/default.aspx) Italian Department of Economic Development (www.sviluppo.gov.au) Link to English language version (www.sviluppoeconomico.gov.it/index.php?option=com_content&view=article&viewType=0&id=2018655&i darea1=1665&idarea2=1667&idarea3=0&idarea4=0&andor=AND&sectionid=0&andorcat=AND&partebass aType=0&idareaCalendario1=0&MvediT=1&showMenu=1&showCat=1&showArchiveNewsBotton=0&idme nu=2297&cattitle1=Contents) Link to current Government incentives for solar power production http://www.sviluppoeconomico.gov.it/index.php?option=com_content&view=article&viewType=1&idarea1=5 93&idarea2=0&idarea3=0&idarea4=0&andor=AND&sectionid=0&andorcat=AND&partebassaType=0&idare aCalendario1=0&MvediT=1&showMenu=1&showCat=1&showArchiveNewsBotton=0&idmenu=2263&id=20 18913 UTEE - Technical Unit for Energy Efficiency (www.efficienzaenergetica.enea.it/unita-utee/)

Page 57

Q&A with Nadia Boschi from Bovis Lend Lease

What are the major issues concerning Energy Efficiency / Green Building in the EU in the coming 5 years? What are the opportunities? Energy efficiency, like the reduction of waste to landfill, the optimization of water usage and the responsible sourcing of materials (e.g. certified wood) are amongst the sustainability objectives established by Lend Lease for all its projects. These objectives are in line with the provisions outlined in the 2010 recast of the EU Energy Performance of Buildings Directive (EPBD) which requires that all new buildings be nearly zero energy by 2020; that all buildings undergoing major renovation should achieve minimum energy performance criteria; that where major building elements are retrofitted or replaced they meet minimum energy performance criteria and that, fiscal incentives are made available, etc). To successfully meet these requirements accuracy and precision of performance measurements are key and lead to a need for technologies such as: Energy efficient lighting; Integrated building components (e.g., windows that not only provide light but generate energy); Better building management systems (BMS); Lighting and heating automation; Energy efficient air conditioning and heat exchanging technologies; Smart metering devices.

Nadia Boschi is the Head of Sustainability (Continental Europe, Middle East & Africa) for Bovis Lend Lease

How much awareness is there on a consumer and company level to save energy? Lend Lease has been setting targets, measuring and monitoring our energy for a number of years now across our business, in our occupied offices and properties we manage. We report on the progress against our targets on an annual basis. More broadly, since the energy crisis of 1973 the need for energy saving is engrained in all stakeholders in the construction industry. Up until recently, Northern European countries have been the most active in driving the energy efficient buildings mainly as a result of the heating requirements in buildings. However, with the increase of IT usage in buildings, changes in lifestyle and increased attention to occupier health and comfort, the energy used by cooling systems is now equally, if not more, important. What are the major growth areas for your business in Europe? One of the key growth areas for our business in Europe is the consolidation of our sustainability service offering across the sectors and geographies where we operate. What are the new technology coming through that is exciting European customers? Lend Lease endorses the triple bottom line approach to sustainability. All technologies that we incorporate in our developments or recommend to our clients must not only be of high environmental content but must also make a good business case. In this respect, we see exciting opportunities for integrated building components, for example windows that not only provide light but generate energy and are well designed; building materials that leverage nano-technology such as thin films and gels for energy production; off grid generation for small scale application including hydrogen generators and fuel cells; small and flexible PV cells and thin, high efficiency insulating materials for energy retrofits.

Page 58

Who are the major customers / early adopters in the market? Developers and large building owners targeting international companies as tenants are some of the most active early adopters along with retail developers who have shown a strong sustainability leadership in the European market. Property companies with extensive building portfolios are a top category in green refurbishment. How is/are the technology/services/products reaching the market? As a large global company we benefit from having a presence in many markets around the world and when a local team faces a project challenge we have a knowledge sharing support system that helps advise on the best that is available. Green Building Councils across Europe are also fostering the spread of green technologies through conferences, publications and other ad hoc events. What are the common mistakes you see from companies entering the European market? The European market is mature and sophisticated and demands accurate and comprehensive performance data about any building component. Any technical data should be from a reputable source and benefits such as energy efficiency, carbon reduction, recycled content or embodied energy should be highlighted. This will make it easier for companies committed to a carbon zero strategy, such as Lend Lease, to source and identify the best products. Incomplete data or exaggerated claims can often devalue the true benefits that a product can offer. Which players or events in the market that can help give me additional information on the European market? Traditional construction material fairs such as SAIE in Italy and BATIMAT in Paris or real estate events such as MIPIM in Cannes, Expo Real in Munich, EIRE in Milan and SIMA in Madrid provide a good overview of real estate developments. For further information see: www.lendlease.com

Page 59

05.

Spain (Portugal)

Spain is currently second largest global solar market and the third largest wind market making it a global leader in renewable energy. Within the Energy Efficiency sectors Spain has come from a lower base with little improvement over the past decade relative to the other major European markets. Spain leads Europe in terms of CO2 emissions per capita. However there has been a steady decrease in energy intensity in the country since 2005, even as overall consumption has increased. Today energy consumption of a Spanish average household is 40 percent lower than the EU average which is explained by a milder climate, reducing the space heating demand. Over the past decade Spain has not been an early adopter of technology, however there has been a growing emphasis placed upon energy efficiency in building regulations. Promotion of solar PV, solar thermal systems and energy efficiency systems through the Technical Buildings Code have also led to many opportunities for installers, manufacturers and suppliers of such equipment. Green Building In Spain approximately 25 percent of energy consumption and CO2 emissions come from buildings. Within this level, 50 percent is due to inadequate insulation. High energy dependence and rising energy costs have made green building a priority area. The Spanish market for new construction is experiencing a deep slump following the global financial crisis and is not expect to recover before 2013, however there are opportunities for retrofitted energy efficiency measures including Retrofitted Energy efficient lighting Building Management Systems Building automation and controls, HVAC (heating, ventilation and air conditioning), lighting and electrical equipment Spain has 17 Autonomous governments. Energy saving programs differs from region to region but most include: Improvements to interior lighting in buildings Renewal of windows Renewal of equipment/installations to improve energy efficiency in residential housing/buildings

Smart Grids and ESCO The implementation of smart meters is being driven by EU legislation but energy saving devices are not currently highly regulated and therefore are still in a growth phase. There are no incentives from the governments (central and regional) to develop these devices. The EU is working on directives and specifications to develop a series of incentives to increase the use of Energy Saving Devices. At the moment the electricity distributors in both Spain and Portugal are collaborating with the European Union in order to develop an evaluation methodology that will be used in the future to evaluate the cost/benefit performance of these devices. Distributors are aiming to increase efficiency by 20 percent through cooperation with final users. A connection between the home appliances and the meter will be available to collect the information in real time. Over the past two years many pilot programs have been developed in both Spain and Portugal. The exploitation of these devices is currently under evaluation by the main national distributors. In parallel, a process of procurement has been initiated in order to open the market to new suppliers as agreements with the current suppliers are only

Page 60

for the launch phase.The research into new suppliers and technology will be conducted through a qualification process and once qualified Requests for Quotes will be issued for further installations. The distributors are providing a platform that will provide information to the end users aiming to make their energy consumption more efficient. They are trying to understand how the final users are managing their electricity consumption. The energy saving itself is not an aspect being handled by distributors but by the Energy Service Companies (ESCO) in the territory.

Applus, a leading Spanish ESCO notes on their website that the volume of the energy efficiency presently amounts to some 100 million euros per annum in Spain. The forecasts show that in Spain, energy efficiency services will grow until they exceed EUR2 trillion (AUD2.7 trillion) in the next five years, generating close to 20,000 jobs.

Tips for Doing Business Spaniards use both their maternal and paternal names; however, you should always address someone by their paternal name only. For example, 'Seor John Smith Wilson' (Smith being the father's name and Wilson the mother's name) would be addressed as 'Seor Smith'. It is best to avoid using a person's first name unless the Spanish contact indicates otherwise. Dress is generally more formal than Australia. Business suit, long sleeve shirt (even in summer) and tie is normal professional wear for men. Womens work dress varies, but we would recommend travelling with a business suit or smart clothing. Working lunches are popular, beginning at 2.00pm and continuing for two or three hours. Kissing is very common in Spain amongst Spaniards (on both cheeks), but it is advisable for Australians to offer a handshake and if a kiss is appropriate the Spanish contact will initiate it.

Links and Industry Contacts ENDESA (www.endesa.com- English version website: www.endesa.com/en/Paginas/Home.aspx) Endesa is one of the largest electric power companies in the world and Spains largest utility. It is also the leading private multinational enterprise in Latin America and is a major player in other energy sectors such as gas, cogeneration and renewable energies. IBERDROLA (www.iberdrola.es - English version website: www.iberdrola.es/webibd/corporativa/iberdrola?cambioIdioma=ESWEBINICIO) The number one energy company in Spain, Iberdrola is the world's top wind power producer and one of the largest international utility companies. Ministry of Industry, Tourism and Commerce - Institute for Diversification and Saving of Energy (IDEA) (www.idae.es - English version website: www.idae.es/index.php/lang.uk) IDAE is a state-owned business entity that reports to the Ministry of Industry, Tourism and Trade via the State Secretary for Energy. Its main activity focus is to achieve the targets set by the 2007-2012 Action Plan under the Spanish Energy Saving and Efficiency Strategy and those of the Renewable Energy Plan for 2005-2010. National Energy Commission (www.cne.es - English version website: www.eng.cne.es/cne/Home) The National Energy Commission is the regulatory body of energy systems. Its objectives are to monitor efficient responsibility in the energy systems as well as operational objectivity and transparency to the benefit of all those individuals who work in these systems including consumers.

Page 61

Q&A with Jos Antonio Castro and Miriam Salguero from the Comisin Nacional de Energa Spains National Energy Commission
What is the current situation in Spain regarding Smart meters? Form an outsource supply point of view the situation in Spain, compared to that of Portugal, is very different. Whereas the Portuguese market is still open to new suppliers of smart meter devices, in Spain binding, massive roll-out plans have already been made and approved. It might take 7 years from the choice of the smart meter supplier to full deployment (which is due by the end of 2018). Five major market players have already chosen suppliers for the bulk of their smart meters. Who are the major smart meter players in Spain? In Spain there are two major smart meter players: Endesa-Enel www.endesa.com/en/aboutEndesa/businessLines/principalesproyectos/Paginas/Telegestion.aspx/ Iberdrola www.iberdrola.es/webibd/corporativa/iberdrola?IDPAG=ENWEBRESINNIDDISTRIBUCION&codCACHE=1 314018701868882

What is the current situation with regard to Smart meter production? Due to the sudden surge in the high volume demand of smart meters, there has been a gap between current production and the production required to meet future needs. To compensate this, many meters are now manufactured overseas (for example in China) despite their proprietary design. Over the last two years there have been several European smart grid events and seminars. Within Europe the UK, France and Germany are currently working on issues relating to the roll out of smart meters. Spain and Italy are well under way. With regards to communication between devices and control centres, Spanish regulation has not identified a particular protocol however interoperability must be guaranteed so as to enable customers to change supplier if they wish, as established in Directive 2009/72/EC with regard to common rules for the internal market in electricity. Who is responsible for deploying smart meters in Spain? In Spain smart readers are deployed by the electricity distributors. The financing of smart meters is provided by distributors such as Endesa and Iberdrola. As in the case of Portugal, the Spanish government does not finance the implementation of smart meters or energy saving devices. No immediate change to this situation is envisaged in the short term. However, there are ToU (Time-of-Use) rates in place and a special low tariff for off-peak electric vehicle charging. What standardisation measures or legislation currently exist in Spain? Two years ago the Spanish National Energy Commission (CNE) developed a Guarantee of Origin' label. This label shows green electricity users the percentage of power that is produced from different sources as well as the level of C02 emissions and the production of radioactive waste. At the moment a Regulation for small-scale power systems is under development aimed at promoting the integration of these systems in the distribution grid.

Page 62

06.

Sweden

Sweden is one of the leading European countries in adopting energy efficiency legislation and implementing energy saving measures. Sweden has a strong background in Green Building techniques not only because of its active adoption of energy efficiency legislation but also because it has relatively high energy usage as a result of the cooler climate. Historically Swedens electricity has come from nuclear and hydro however wind energy is expected to provide a significant proportion of energy by 2020. Smart grids are seen as a key component to be able to properly integrate this intermittent power source (wind energy) into the Swedish energy system. The Swedish Government is keen to profile itself as a world leader in smart grids as Sweden has a strong existing electrical generation and distribution industry. Smart Grids Sweden became the first European nation to achieve 100 percent smart meter rollout in 2010. Swedish smart meters are currently used for monthly meter readings though they can gather hourly data and have the potential to be used for managing consumer demand based on hourly electricity pricing. The Swedish Government has indicated it is considering the necessary legislation to permit hourly meter reading with the goal of enabling consumers to better manage their electricity and reduce peak electrical loads. As proof of Swedens strong existing industry and research areas, Sweden is managing Europes research and commercialisation cluster for smart grids through the KIC InnoEnergy Program. One sixth of the KICs EUR700 million (AUD958 million) budget (2011-2014) has been allocated to the Swedish cluster to commercialise technology and undertake applied research. (For more information see www.kic-innoenergy.com/co-locationmenu/co-locations/cc-sweden.html) Stockholm is the European research centre for European Smart Grid and Electrical Storage. The research centre is a collaboration project between researchers and industry which is funded by the European Institute of Innovation and Technology with more than EUR100 million (AUD137 million) in EU and industry funding. The Stockholm region is rapidly developing into one of the key research and commercialisation global smart grid clusters. The regions goal is to train 1200 PHD students and create 20 spin off companies over the first five years of the project. There are two major Swedish smart grid projects of international interest. The Stockholm Royal Seaport project, detailed earlier in this report, and a smart grid project planned for the Swedish island Gotland. The Stockholm Royal Seaport project presents opportunities for Australian companies with innovative products or services to form European alliances and seek collaborative partners. (For more information see www.stockholmroyalseaport.com/) The Gotland project is a collaborative venture between ABB, the Swedish/Swiss power grid manufacturer, and Vattenfall, Europes fifth largest electricity provider. This project is a full-scale smart gird demonstration plant. (For more information see www.smartgridgotland.se)

Opportunities are most likely to be linked to the two major projects listed above, or in collaboration with the following key major partners in the InnoEnergy research cluster: KTH (Royal Institute of Technology) Uppsala University Vattenfall Fortum ABB Ericsson

Page 63

Tips for Doing Business Generally speaking Swedes have a lot in common with Australians. They are easy to get along with, first name terms are widely accepted, and they enjoy nature and sports. Most business people have tight schedules so it is advisable to seek appointments well in advance of your visit. The annual vacation period occurs from late June to the beginning of August and should be avoided as appointments will be difficult to arrange. This also applies to the Christmas and New Year period. General greetings are by handshake, stating clearly both your first name and surname. Punctuality is required both for business and social appointments. Decision-making is frequently by consensus, therefore on-the-spot decisions are rare and attempts to force a decision will be counter-productive.

Links and Industry Contacts FSEK, The Association of Swedish Regional Energy Agencies (fsek.se/?q=node/5) FSEK is the centralised association of the Swedish regional energy agencies and other organisations with similar activities. The tasks of the regional energy agencies are to work towards greater use of renewable energy and to ensure the efficient use of energy in their region. Ministry for Enterprise, Energy & Communications (www.sweden.gov.se/sb/d/2067) The Ministry of Enterprise, Energy and Communications manages government affairs in business development, competition, electronic communications, energy, ICT policy, regional growth, tourism and transport. Ministry of the Environment (www.sweden.gov.se/sb/d/2066) The Ministry of the Environment assists the Government create and implement policies in the following areas: climate, water and sea, nature conservation and biological diversity, sustainable development, sustainable planning and housing environments, international environmental cooperation, chemicals and eco-cycles, nuclear safety and radiation protection, environmental legislation, technology and research. Svebio, the Swedish Bioenergy Association (www.svebio.se/english) Non-profit industry organisation with approximately 300 members. Swedish District Heating Association (www.svenskfjarrvarme.se/In-English/District-Heating-in-Sweden/) An industry organisation working in areas such as research and development (in cooperation with the Swedish Energy Agency), product testing, standardisation and quality assurance as well as information and statistics. Swedish Energy Agency (energimyndigheten.se/en/) The Swedish Energy Agency is the government agency in charge of national energy policy.

Page 64

07.

United Kingdom (UK)

The UK sits at the forefront of energy efficiency efforts within Europe and is committed to achieving ambitious goals, as set out in recent action plans. The UK estimates that over half the savings achieved from climate change programs are a direct result of energy efficiency policies. Efforts to improve energy efficiency have involved international cooperation within the G8, the UN Convention on Climate Change and the European Union. Policies are mainly centred on the household sector, the industrial sector, the public sector and the transport sector. Green Building The UK has recently moved to implement a bill designed to make energy efficiency products and services available to all consumers. The Energy Bill, operational in 2012, enables private firms to offer consumers energy efficiency improvements to their homes and businesses at no upfront costs, instead, through instalment payments on their energy bills. Such incentives are expected to boost energy efficiency across the household and building sectors. Historically household energy efficiency in the UK has improved by around 19 percent over the period 1990-2008. However, most of this improvement was in the early part of the 1990s. Since this time increases in domestic electrical appliances per household, has balanced the improvements in insulation and heating efficiency. More recently, efficiency improvements within space heating has resulted in some net energy savings. Though it is thought that there is a saturation effect in energy efficiency improvements and the new government incentives are required to stimulate further investment. It is still to be seen the result on the market place of the UK governments initiatives. There has been some scepticism within the industry of the actual potential, particularly of the ESCO model for achieving energy savings, based partially on the relatively mild climate, both summer and winter, relative to counties with more extreme temperature fluctuations (reducing the benefit of more costly energy efficiency measures in buildings, and the fact that often the investments with the largest scope for savings (like lighting) have already been taken by building managers. Smart meters The Department of Energy and Climate Change (DECC) has been placed in charge of the roll out of 53 million smart meters to all British homes and some businesses. The information provided by smart meters will help consumers to better manage and reduce energy use and potentially save money. Energy suppliers will be able to offer a wider range of services and tariffs to better manage their customer relationships. Smart Meters will also make an important step towards the implementation of smart grids, designed to improve network efficiency and responsiveness throughout the UK. Trials are set to begin in September 2011, aimed at encouraging householders to take up more efficient energy practices and increase insulation installations. Incentives will be offered through various retail outlets. These trials make up part of the flagship Green deal, in which consumers will have access to up to GBP10,000 (AUD15,600) towards upfront costs for energy efficiency improvement. UK is an interesting market both with its size, recent energy efficiency initiatives and its historic role as Australian companies stepping stone in Europe. Because of the language service exports, in particular, are relatively easy to enter compared to other European markets where greater adaption would likely be required. However partially because of the English language it makes it a very competitive market. Companies should also consider whether their product, technology or service is more naturally suited to other climatic, economic or consumer conditions in mainland Europe.

Page 65

Tips for Doing Business The business culture is more conservative than Australia, with executives preferring a more formal approach. Most business people will wear suits, although smart-casual is becoming more widespread in some industry sectors. If in doubt, always wear a suit. In addition, please note that the description of 'lounge suit' on invitations typically means business attire not 'smart casual'. Many UK companies are entrepreneurial and interested in new ideas, but rarely agree to a cold meeting. Expect to introduce your company and proposition at least three to four weeks before the planned meeting date. Make an introductory telephone call and follow-up with information by post, fax or email.

Links and Industry Contacts Department for Environment, Food and Rural affairs (www.defra.gov.uk/environment/climate/) Department of Energy and Climate Change (www.decc.gov.uk) DirectGov Public Services (www.direct.gov.uk/en/Environmentandgreenerliving/Energyandwatersaving/Renewableandlowcarbonenergy/index .htm) Energy Saving Trust (www.energysavingtrust.org.uk/) UK Energy Efficiency (www.ukenergyefficiency.co.uk/) UK Energy Efficiency Action Plan 2007 via the European Union energy website (ec.europa.eu/energy/demand/legislation/doc/neeap/uk_en.pdf)

Page 66

Appendices
01. Key European Agencies for Energy Efficiency
www.ec.europa.eu/energy/effici ency Official EU Energy Efficiency site

List of Key European Government Agencies EEA, European Commission Intelligent Energy Executive Agency EnR, Association of European Energy Efficiency Agency

www.enr-network.org

EnR is a voluntary network of European energy agencies which aims at promoting sustainable energy best practice. EnR also strengthens cooperation between members and other key European actors on all sustainable energy issues (energy efficiency, sustainable transport and renewable energy MURE is an information platform on energy efficiency policies in Europe. MURE is also a policy evaluation tool. Together with the Odyssee project MURE forms the most comprehensive tools for the assessment of energy efficiency trends and policies in Europe Information source on European countries performance in achieving Energy Efficiency and their policies to stimiluat investment in energy efficiency Austrian Energy Agency Energy Institute Hrvoje Poar has been founded as a non-profit institution. Its goals are to provide expert and scientific support to: the strategic development of the Croatian energy system and its sub-systems, the processes of legislative reform and development, the advancement of economic relations, and to the development of relevant institutions. The Cyprus institute of Energy was founded in the year 2000 by the Minister of Commerce Industry and Tourism ENVIROS is a business and environmental consultancy providing a wide range of assistance and services to industrial, commercial and public sectors The Danish Energy Agency engages nationally and internationally in production, supply and consumption of energy - as well as the efforts to reduce emissions of greenhouse gases

MURE

www.mure2.com

Odeyssee Indicators for Energy Efficiency EA in Austria EIHP in Croatia

www.odyssee-indicators.org

www.energyagency.at www.eihp.hr

CIE in Cyprus

www.cie.org.cy

Enviros in Czech Republic

www.enviros.cz

DEA in Denmark

www.ens.dk

Page 67

MOTIVA in Finland

www.motiva.fi

Wholly owned government company aimed at reducing energy usage French Environment and Energy Management Agency The Centre for Renewable Energy Sources and Saving (CRES) is the Greek national entity for the promotion of renewable energy sources, rational use of energy and energy conservation. Energy Centre" Energy Efficiency, Environment and Energy Information Agency Non-Profit Company is owned by the Ministry of Transport, Telecommunication and Energy and it is the national energy agency responsible for the improvement of the energy efficiency and renewable energy utilization The Sustainable Energy Authority of Ireland (SEAI), formerly the Irish Energy Centre was set up by the government in 2002 as Irelands national energy authority. Energy efficiency first: implementing strong energy efficiency actions that radically reduce energy intensity and usage Italian National agency for new technologies, Energy and sustainable economic development Investment and Development Agency of Latvia (LIAA) Under the assignment of the Ministry of Energy, Energy Agency is engaged in the organization of international cooperation in the energy sector and coordination of foreign technical assistance to the energy sector The Malta Resources Authority is a public corporate body with regulatory responsibilities relating to water, energy and mineral resources in the Maltese Islands Dutch Ministry for Energy

ADEME, France CRES in Greece

www.ademe.fr www.cres.gr

ENCEN in Hungary

www.energiakozpont.hu

SEAI in Ireland

www.sustainableenergyireland.c om

ENEA in Italy

www.enea.it

LIAA in Latvia ENA in Lithuania

www.liaa.gov.lv www.ena.lt

MRA in Malta

www.mra.org.mt

NL Agency in The Netherlands IFE in Norway

www.agentschapnl.nl

www.ife.no

IFE is an international research institute for energy and nuclear technology. IFEs mandate is to undertake research and development, KAPE (The Polish National Energy Conservation Agency) is the National Contact Point for the Intelligent Energy - Europe program within the "Competitiveness and Innovation Framework Program (CIP ADENE IS a private institution in which the Ministry of Economy, Innovation and Development participates and promotes public interest activities in the Energy Policy

KAPE in Poland

www.kape.gov.pl

ADENE in Portugal

www.adene.pt

Page 68

domain ANRE in Romania www.anre.ro Romanian Energy Regulatory Authority - ANRE - is a public independent body of national interest whose mission is to create and implement the appropriate regulatory system to ensure the proper functioning of the electricity, heat and gas markets, in terms of efficiency, competition, transparency and consumer protection Development of scientific research and technological engineering activities for increasing energy efficiency of electric and thermal energy over the entire production, distribution and transport chain and RES promotion, in the context of sustainable development and integration into the European Union Slovakian Energy Agency The Instituto para la Diversificacin y Ahorro de la Energa (Institute for Diversification and Saving of Energy, or IDAE) is a state-owned business entity that reports to the Ministry of Industry, Tourism and Trade through the State Secretary for Energy The Swedish Energy Agency operates in various sectors of society to create conditions for an efficient and sustainable energy use and a cost-effective Swedish energy supply AEA Europe is a leading consulting firm focused on working with its customers to create inspired solutions that solve complex issues in the areas of climate change, energy and environment, underpinned by expert knowledge management and innovative IT services

Icemenerg in Romania

www.icemenerg.ro

SEA in Slovakia IDAE in Spain

www.siea.sk www.idae.es

STEM in Sweden

www.energimyndigheten.se

AEA in United Kingdom

www.aeat.co.uk

Page 69

02.

European Energy Efficiency Companies

European Energy Efficiency Companies Austrian Companies Landis+Gyr Belgium Companies Elia System Operator SA/NV Umicore SA Belgium www.elia.be Belgium's transmission system operator. Austria www.landisgyr.com Smart Grid Metering

Belgium

www.umicore.com

Belgium-based metals and materials group involved in the processing and recycling of materials for renewable energy technology.

Czech Companies CityPlan Czech www.cityplan.cz CityPlan is a multidisciplinary professional consulting, engineering, design and planning firm established in 1992. CityPlan offers experience in a wide range of projects in the energy, transportation, civil and environmental fields, including budget and financial analysis. The Renewable Energy Sources and Energy Efficiency Centre offers services, e.g. energy audits, optimizing of energy systems, project development. Enviros is an energy and environmental consultancy company. SEVEn, the centre for energy efficiency, is an independent organisation which is not affiliated to any domestic or foreign organisation. SEVEn focuses on overcoming the barriers to practical energy savings in industry, residential and commercial sectors.SEVEn is involved in the following programs

Ekowatt

Czech

www.ekowatt.cz/en

ENVIROS

Czech

www.enviros.cz

SEVEn

Czech

www.svn.cz/en

Danish Companies Rockwool International A/S Finnish Companies Fortum OYJ French Companies Dalkia International France www.dalkia.com France-based subsidiary of Veolia Finland www.fortum.com Finland-based power and heat company. Denmark www.rockwool.com A producer of stone wool used for insulation to conserve energy in buildings.

Page 70

Environnement and Electricit de France (EDF). Eaton Power Quality SA/France France www.eaton.com/Fr ance French-based global leader in systems for the quality, distribution and control of power supplies, components and hydraulic systems. Main French power producer with activity in renewable or recycled energy sources. Rueil Malmaison-based firm focused on electrical distribution, automation and control which also produces automated components for renewable energy systems. Veolia works in many areas of environmental services including; water management, waste treatment, energy efficiency and mobility.

GDF Suez

France

www.gdfsuez.com/

Schneider Electric SA

France

www.schneiderelec tric.com

Veolia

France

www.veolia.com/en /

German Companies 2G Bio-Energietechnik AG Aixtron SE NA Germany www.2-g.de German-based provider of combined heat and power plants (CHP). AIXTRON AG is a provider of deposition equipment to the semiconductor industry. Their equipment is used in the manufacture of LEDs, germanium and GaAs solar cells and OLEDs. Project developer and consultancy for biomass plants and efficient energy supply and facilities. HVAC System Controls.

Germany

www.aixtron.com

AGO AG Energie + Anlagen Bauer Optimising Technology Bosch Thermotechnik GmbH

Germany

www.ago.ag

Germany

www.baopt.com

Germany

www.boschthermotechnology.c om www.centrotec.de

Heating products and hot water solutions.

CENTROTEC Sustainable AG Conergy AG

Germany

Firm specialising in energy-efficient technology for buildings. Hamburg-based PV and passive system integrator and inverter manufacturer. High energy-efficient building automation systems. Air technology and motors.

Germany

www.conergy.de

DEOS control systems GmbH Ebm-papst

Germany

www.deos-ag.com

Germany

www.ebmpapst.co m www.EnergyICT.de

EnergyICT GmbH

Germany

EnergyICT is a leader in providing Energy Information Technology, Communication Technology and Service Solutions.

Page 71

E.ON Osram Phoenix Solar AG

Germany Germany Germany

www.eon.com/en/ www.osram.com www.phoenixsolar. de www.rwe.com/web/ cms/en/10122/rwe/r we-group/ www.siemens.de www.sma.de

International power and gas company. Energy Efficiency Lighting. Develpoer of large-scale PV power plants, operates as a photovoltaic systems integrator. European electricity and gas company. Active in the generation, trading transmission and supply of electricity and gas. Worldwide innovation leader in fans and motors. Designs and manufactures "Sunny Boy" photovolatic inverters and provides computerbased control systems for decentralised energy supply (in particular the inverters). Germany-based solar products distributor and solar project EPC contractor. Bonn-based vertically integrated PV manufacturer. German chemicals company; major manufacturer of polysilicon for solar and semiconductor industries.

RWE Group

Germany

Siemens SMA Solar Technology AG

Germany Germany

Solarhybrid AG

Germany

www.solarhybrid.ag

Solarworld AG

Germany

www.solarworld.de

Wacker Chemie AG

Germany

www.wacker.com

Hungarian Companies E-Star Alternative Energy Service Plc Hungary www.e-star.hu Firm primarily involved in implementing energy efficiency projects from renewable energy sources and in solar and biomass project development.

Italian Companies ErgyCapital SpA Italy www.ergycapital.co m Investment company specializing in renewable energy and energy efficiency.

Luxembourg Companies 3W Power Holdings SA Luxembourg www.aegps.com Holding company of AEG Power Solutions, engages in the design, development, manufacture, marketing, sale, and distribution of power electronics systems solutions.

Irish Companies Kingspan Group PLC Ireland www.kingspan.com Company which through its subsidiaries manufacture energy conserving building solutions for the construction industry.

Polish Companies

Page 72

Polish Energy Partners SA Portuguese Companies EDP - Energias de Portugal SA British Companies Bglobal PLC

Poland

www.pepsa.com.pl

Wind power projects developer.

Portugal

www.edp.pt

Electricity supplier.

United Kingdom United Kingdom

www.bglobalmeteri ng.com www.dialight.com

Smart metering and energy data company.

Dialight PLC

Dialight manufacturers LED technology for the electronics industry including vehicles, architecture and public lighting. Employee-owned trust installing insulation, cavity wall and loft insulation, and allocating and administering energy efficiency funding. Residential energy efficiency solutions provider.

Eaga Partnership Ltd

United Kingdom

www.eagagroup.co m

Eaga PLC

United Kingdom United Kingdom

www.eaga.com

Energetix Group PLC

www.energetixgrou p.com

Specialises in developing intellectual property into new products to target global battery market for Uniterruptible Power Supplied (UPS) and European boiler market. London-based global automation, controls and process solutions group also active in energy efficiency and digital energy projects. Focused on engineering and consultancy services for the automotive companies. RPS is a Planning and Environmental Consultancy, with Scottish offices in Glasgow, Edinburgh, Aberdeen and Thurso. Sabien builds and distributes an energy-saving boiler control unit known as the M2G. London-based specialist manufacturer and developer of superconductive materials for commercial applications.

Invensys PLC

United Kingdom

www.invensys.com

Ricardo PLC

United Kingdom United Kingdom

www.ricardo.com

RPS Group PLC

www.rpsgroup.com

Sabien Technology Group PLC Zenergy Power PLC

United Kingdom United Kingdom

www.sabientech.co.uk www.zenergypower .com

Spanish Companies Exide Transportation Holding Europe SL Swedish Companies Nibe Industrier AB Sweden www.nibe.se Manufacturer of domestic heating products and Spain Manufacturer of electricity generating components.

Page 73

solutions for ventilation, cooling and heat recovery. Opcon AB Sweden www.opcon.se Eenergy and environmental technology group that develops, produces and markets systems and products for eco-friendly, efficient and resource-effective use of energy. Energy efficient building consultants focussing on heat exchange, including air-to-air and air-towater heat exchangers.

VKG Energy Services AB

Sweden

www.vkg.se

Page 74

03.

Trade Shows and Conferences

Trade Shows and Conferences Green Building Conferences Energy Efficiency Global Forum

Date 12-14 April 2011

City Brussels

Website www.eeglobalfo rum.org

Details The Energy Efficiency Global Forum (EE Global) is a launching pad for ideas that change the energy landscape. The forum brings together high-level officials from government, business and NGOs. EE Global is one event in the energy efficiency industry where people with a shared passion in energy efficiency and the power to make a difference come together to effect change. As a high-level, invitation-only annual gathering, the Forum sets out be the premier event in Europe that promotes an energy efficiency ethic to drive action in the region. Policymakers, NGOs and business leaders are encouraged to participate in an open dialogue that expresses national and worldwide views on energy efficiency and the resulting impact on the environment, national security and economic growth. EEDAL is an International Conference on Energy Efficiency in Domestic Appliances and Lighting. The EEDAL conference has established itself as a well-reputed and powerful forum, where the latest political, economic and technological directions are discussed. The European Conference on Energy Efficiency and Sustainability in Architecture and Planning deals with the issues of the urban regeneration under three perspectives: sustainable architecture and energy efficiency, sustainable city and social planning and sustainable urban economy.

Euro Mediterranean Energy Efficiency Forum

10 - 11 May 2011

Monte Carlo

www.eeforum.eu

EEDAL 2011 Energy Efficiency in Domestic Appliances and Lighting

24 - 26 May 2011

Copenhagen

www.eedal.dk

European Conference on Energy Efficiency and Sustainability in Architecture and Planning

27-29 June 2011

Donostia San Sebastian

www.eesap.org

Page 75

World Sustainable Building Conference

18-21 October 2011

Helsinki

www.sb11.org/

The World Sustainable Building Conference addresses new opportunities for - improving quality of life, mitigating effects of climate change and making new business.

Trade Shows Green Building ISH 2011

Date

City

Website

Details

15-19 March 2011

Frankfurt

ish.messefrankf urt.com/frankfurt /en/besucher/wil lkommen.html

ISH provides the worlds biggest showcase for innovative bathroom design, energy efficient heating and air-conditioning technology and renewable energies Pollutec is arguably the worlds leading environmental and clean technology conference and trade show. Held every year in either Paris or Lyon, Pollutec attracts an international clientele representing 48 countries across every continent. International Construction Exhibition

Pollutec Horizons

29 November - 2 December 2011

Paris

www.pollutec.co m/

CONSTRUMAT

16-21 May 2011

Barcelona

www.construma t.com

Energy Efficiency Consulting Services and Green ICT CeBIT 2011 1-5 March 2011 Hanover www.cebit.de/ho mepage_e The worlds largest ICT annual trade fair. CeBIT green IT: innovative 'green' products and solutions of the ICT-Industry.

Smart Grids and Smart Metering E-world 8-10 February 2011 Essen www.e-world2011.com International trade fair held annually for the power supply industry, public utilities, industrial consumers, municipalities and service providers.

Energy

4-8 April 2011

Hanover

www.hannover messe.de/profile _eg

Leading Trade Fair for Renewable and Conventional Power Generation, Power Supply, Transmission, Distribution and Storage Bring together Researchers, Industry, and National Labs to

International Conference on

October 17-20

Brussels

www.ieeesmartgridcomm.

Page 76

Smart Grid Communications

org/2011/

exchange ideas, enabling technologies, and share field trial experience Over 780 participants from 50 countries attended the previous conference. Europe's leading platform for the electricity supply industry.

Smart Grids Europe

April, 2012

Berlin

www.tdeurope.eu

Page 77

04.

Trade and Advocacy Associations

Trade and Advocacy Associations European wide advocacy associations European Alliance to Save Energy European Alliance of Companies for Energy Efficiency (EuroACE) European Council for an Energy Efficient Economy Build Up EU Buildings Performance Institute Europe - BPIE Energy Cities of Europ European Trade Associations European Association of Energy Service Companies European Building Automation and Controls Association European Heat Pump Association European Solar Thermal Association European Solar Shading Association European Photovoltaic Association Lighting Association Independent Energy Saving Promoters Energy Savings Trust SEVEn Instituto para la Diversificacin y el Ahorro Energtico (Energy Saving Authority) Green Building Councils Sweden Green Building Council UK Green Building Council Association of Green Building Professionals Green Building Council of Spain Initiative EnergieEffizienz Sweden UK Central Eastern Europe Spain Germany www.sgbc.se www.ukgbc.org www.ceegbc.org www.gbce.es/en www.dena.de/en/ UK Czech Spain www.energysavingtrust.org.uk www.svn.cz/en www.idae.es Industry Group Industry Group www.eu-esco.org www.eubac.org Industry Group Industry Group www.euase.eu www.euroace.org

Industry Group Government Industry Group Government

www.eceee.org www.buildup.eu www.bpie.eu www.energy-cities.eu

Industry Group Industry Group Industry Group Industry Group Industry Group

www.ehpa.org www.estif.org www.es-so.com www.epia.org www.lightingassociation.com

Page 78

05.

References

Key Research Sources Energy Efficiency Indicators: www.odyssee-indicators.org/publications/country_profiles.php Energy Efficiency Plan 2011 European Commission: www.ec.europa.eu/energy/efficiency/action_plan/action_plan_en.htm Energy Performance Contracting in the European Union - European Association of Energy Service Companies: www.eu-esco.org European Smart Grids Technology Platform, Directorate-General for Research, Directorate J Energy, Energy Production and Distribution Systems: www.europa.eu.int/comm/research/energy Forecasts and Growth Opportunities in the Total European Lighting Equipment Market, 2010, Frost and Sullivan Green Buildings in Europe Investment Opportunities, 2010, Frost and Sullivan In-depth Evaluation of National Energy Efficiency Action Plans - Energy Efficiency Watch (EEW): www.energyefficiency-watch.org Latest Development of Energy Service Companies across Europe - European Commission, Joint Research Centre, Institute Environment and Sustainability: re.jrc.ec.europa.eu/energyefficiency/ Overall Energy Efficiency Trends and Policies in the EU 27 - ADEME Editions, Paris 2009: www.odysseeindicators.org/ The European Union Standards and Conformity Assessment system - The Department of Industry, Science and Resources Performance Contracting, 2010, Frost and Sullivan

Exchange Rates Used in Report 18/08/2011 USD1 = AUD0.9454 EUR1 = AUD1.3687 GBP1 = AUD1.5596

Page 79

Disclaimer & Copyright Notice

This report was compiled by Austrade for Enterprise Connect to provide a broad overview of the European markets for energy efficiency technology and solutions, summarising the key drivers and areas of significant future demand. The report highlights a number of European markets (based on current size or potential for rapid growth) in the energy efficiency sector and also identifies a number of the current key agencies and companies working in the sector. The report also provides information for Australian companies who are seeking to enter the European market, whether it is directly through export or through a joint venture or other form of collaboration. This report provides general information and Austrade makes no warranty as to the fitness for any particular purpose or assumes legal liability for the accuracy or usefulness of any information provided. Austrade denies liability for any loss that may arise from reliance or use of the information, which is the sole responsibility of the user. The content of this report is copyright to the original authors or publishers. Under no circumstances should further copies be made either electronically or by photocopy. All quotations from the material must be acknowledged.

Page 80