Awareness of energy efficiency varies widely across Europe, with northern European and Scandinavian countries leading the way with higher standards for buildings and appliances and also a greater consciousness of energy conservation.

The European Emissions Trading Scheme (ETS) is expected to increase the number of energy efficiency projects across Europe as there are estimated to be 18% in potential energy savings across the EU. Additionally, EU Member States have an obligation to save 1% of energy each year based on 2000 consumption levels. They are also required to increase Combined Heat & Power (CHP) usage up to 18% by 2010. I am a strong believer that legislation and regulation are positive drivers of change across the EU and will prove beneficial to companies and governments. As energy prices continue to rise, the benefits from using energy more efficiently become immediately apparent.

Energy Efficiency measures are expected to produce 10 billion in savings across the EU, savings which should make European companies more competitive as implementation of energy efficiency measures contribute to economic growth, rather than inhibit it.

Renewable Energy is also obligated under EU Directives which came into full force in 2001. All EU Member States are obliged to reach national renewable energy targets, with the total share of renewables reaching 10% of total energy supply. In order to encourage renewable energy and to attract investment into clean energy projects, Member States are obliged to create supportive policy and regulatory support schemes. These support schemes vary from “feed-in” tariffs to green national certificate schemes. The Directive also proved beneficial from a communications perspective as all Member States now have a greater awareness of the importance and role of renewables.

SE Europe will need to modify its laws and regulations to support renewable energy projects in order to meet EU Directives and to attract the necessary private sector funds to generate green kilowatts as part of the country's energy mix.

Companies should be aware of the Directives as mentioned above and begin implementing changes. However, companies should take the approach that implementing energy efficiency will generate enormous savings and thus the decision to act should be a business decision to impact profitability, rather than taking simply a compliance approach.

Now that the Kyoto Protocol is in full force, Bulgarian companies should take advantage of the Joint Implementation (JI) flexible mechanism which can attract finance and utilize funds available for energy efficiency and renewable energy projects.

The target in Austria is a reduction of 8% based on 1990 emissions. This target will be difficult for us to achieve since we already produce the majority of our electricity from clean sources. Seventy percent of our electricity comes from hydroelectric power. Countries which are producing energy from coal or which have energy intensive industries such as cement, glass or aluminum will have more opportunities to reduce emissions through better technologies.

Thus Austria will most likely have to participate in emissions trading in order to purchase emissions reduction credits from abroad. Within the European Trading Scheme (ETS) there is currently an evenly balanced supply and demand of proposed certificates. However, things could change rapidly if the Japanese Power Companies begin buying certificates on the European market. This could cause dramatic shortages and prices could rise from 6 to 75 euros/tonne. It would be very interesting if countries such as Bulgaria could begin offering certificates into the European market.

In order for projects to be implemented two parameters must be in place. The first is a supportive legislative and regulatory environment which minimizes risk in the marketplace. The second is an active private finance market which recognizes that stability that has been created, and views renewable energy and energy efficiency as a profitable business venture. Thus, before money begins flowing, countries need to focus on stabile tariff and support schemes. Both feed-in tariffs and green certificates have proven to stimulate markets if implemented effectively.

Our partnership, The Renewable Energy and Energy Efficiency Partnership (REEEP), helps to identify the most appropriate schemes for a particular market. Since we are global, we can access successful models from other countries and help in tailoring them to a local marketplace.

The key is to provide long term stability with respect to licensing systems and tariff structures. If there is a clear political commitment to support renewable energy and energy efficiency, the market forces will create the industry using funds and technologies which are economically viable. There are funding and guarantee mechanisms available, for example there are Carbon Funds, which are actively seeking good projects. But recognize that Carbon Credits will only account for 10% of the total required investment costs, so the remainder of the funding must come from different sources.

The REEEP is also focused on attracting finance and in developing funding mechanisms which support renewable energy and energy efficiency projects. We work with the finance community to develop tools and capacity necessary to attract finance and support the development of renewable and energy efficient projects. We are not a project implementation organization, but are focused on creating the conditions for countries to meet their energy targets and to utilize the available supply of indigenous energy sources.

The Renewable Energy and Energy Efficiency Partnership (REEEP) is an active global partnership that structures policy initiatives for clean energy markets, and facilitates financing for energy projects.

Backed by national governments, financial and business professionals, and NGOs, REEEP is uniquely placed among international initiatives to drive the integration of renewable and energy efficient systems into national and global energy policy. REEEP's regional secretariats provide access to best practice in policy and finance to promote renewable energy and energy efficiency.

REEEP's international secretariat engages political, financial and business support to reduce the risk inherent in implementing new policy and financing initiatives. REEEP's network acts as a clearing house for best practice, and a service centre to support its partners in making renewable and energy efficient power a reality.