Presentation Launch Workshop Prague 23 November 2021

here

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Financing Europe’s Green Recovery Overall project objectives Support stakeholders in making the best use of EU funding for an economic recovery consistent with

the increased 2030 climate ambitions

• Provide key information to the climate community on green finance opportunities in the new EU financial framework; • Strengthen capacity of relevant stakeholders for tackling key investment challenges and reaping opportunities in Europe’s clean energy transition • Assess the link of public finance opportunities to transformative, large-scale investments in key sectors for selected European countries; • Illustrate how a combination of EU financing, domestic policy and regulatory reforms could be integrated into the EU’s long-term economic (European Semester) as well as climate and energy governance (National Energy and Climate Plans (NECPs)).

The project “Financing Europe’s Green Recovery” is financed by Agora Energiewende with lead partner Climate & Company 3

Our 'Field Guide' to the EU Budget Jungle Matching money with green ideas - published in May 2021

→ Key EU funding opportunities and financing mechanisms → Governance mechanisms, like the climate mainstreaming target and the European Semester

→ Link to upcoming legislative and reform packages → Key technologies for industry, buildings, transport, energy sector and corresponding types of effective financial instruments Find the publication via Climate & Company or Agora Energiewende

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Developing country-specific recommendations for 5 EU countries Target National Countries Partner Czechia Czech Technical University in Prague

Poland

WISE Europa

Italy Ecco Spain Comillas Pontifical University France Agora Energiewende

Target audience: National Ministries, progressive stakeholders, European Commission

Objectives → To generate, based on existing data, country-specific recommendations for future key transformative investments and policy reforms that can be used to accelerate climate action (socalled flagships)

→ To contribute to the monitoring, implementation and further evolution of economic recovery plans and of national energy and climate plans in the selected countries → To exemplify how EU-funding and national funding and regulation can successfully leverage the investment required to implement specific flagships as a contribution for transitioning towards climate neutrality → To build a community of experts, stakeholders and policymakers engaging on these topics 5

Developing ‘flagships’ for 6 carbon-intensive sectors Key elements for each flagship analysis What is a flagship?

Key transformative investment opportunities that are priorities for climate action in sector Flagship analysis is accompanied by a set of recommendations for financing and reforms to implement then Example: “add XX thousand solar rooftops by 2025” or “help XX cities decarbonize their district heating & cooling networks by XX”

• Assessment of the progress that can be achieved by the Recovery and Resilience Plan (RRP) against the respective investment needs baseline, discussion of the gaps and how they can be closed through modifications in the RRP and/or the National Energy and Climate Plans, provision of a critical review considering the 2030 and 2050 targets/ relevant strategies • Assessment of contribution for GHG emission reduction

• Review of cost-effectiveness and investment needs (in order to achieve 2030 climate targets) • Reforms: Identify the existing regulatory and non-regulatory barriers to investment in flagship technologies and identify key enabling reforms • Finance: Identifying the role of public and private sector finance to enable implementation of flagships. Opportunities from RRP and EU Green Deal: what's missing and what can be covered by national government or promotional banks

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Key steps for each flagship and set of country-specific recommendations

• What are the biggest challenges in the sector?

• Where are the biggest barriers for investment?

• Where are the biggest investment gaps?

• What is proposed in key policy documents (national strategies, NECP, RRP, etc.)?

Analysis of barriers and opportunities on sectoral level

Setting a flagship target • Development of realistic yet ambitious target that has significant GHG emission reduction potential as well as a transformative character • Calculation of investment needs and gap to realize flagship • Calculation of GHG emission reduction potential

• Proposal of policy reforms • Identification of suitable financing instruments • Highlight role of public financing (e.g., EU budget)

Implementation of the flagship

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Czechia- Key country info

• Total Population: • Czechia: 10.7 million (2020)1

• GDP Total: • Czechia: €209 Billion (2020); 214 Billion (2018) • European Union: €13.07 Trillion (2020); 13.72 Trillion (2018)3

• GDP Per capita: • Czechia: €19,575 (2020); €20,140 (2018)2 • European Union: €29,177 (2020); €30,704 (2018)

• Most important sectors: • 2018: Services 56.42%; Industry 31.76%; Agriculture 1.94%4 • 2020: Services 57.5%; Industry 31.49%; Agriculture 1.93%4

Czechia's Population Source: WorldBank.com

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Czechia - Macroeconomic outlook after Covid 19 pandemic GDP contraction in pandemic

Macroeconomic developments and forecasts

→ GDP declined by 5.6% and the unemployment rate rising to 2.6%

2019

→ Swift recovery is expected with 3.9% growth in 2021 and 4.5% growth in 2022

2020

2021

2022

2023

2024

2025

2026

COM

RRP

COM

RRP

COM

RRP

RRP

RRP

RRP

RRP

1.9

2.1

2.0

2.0

→ Investments expected to recover at low rate

Real GDP (% Change)

2.3

-5.6

-5.6

3.9*

3.1

4.5*

3.7

Main measures to cope with pandemic:

HICP Inflation (% Change)

2.6

3.3

3.3

2.7*

2.4

2.3*

2.3

3.9

4.2

4.2

2.

1.8

2.1

1.7

2.0

1.9

2.0

2.0

0.3

-1.5

-1.5

-1.5

-1.1

0.3

0.1

0.3

0.1

0

0

→ Focus on private consumption (e.g., cuts in personal income tax) → Short-time work schemes like the ‘Antivirus’ programme and the ‘Compensation bonus for self-employed’, subsidies schemes for companies, as well as by declining corporate income tax and VAT collection linked to the drop in private consumption1

GDP Deflator Employment (% Change)

Data source: Commission’s Summer interim Forecast (2021) (COM*)1

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Czechia- National energy and climate targets Latest available

2020 target

2030 target 1

Assessment of CZ ambition (by European Commission) 2

GHG emission target compared to 2005 under the Effort Sharing Regulation (%)

4% (2018)

9%

-14%

Plan only mentions non-ETS 2030 GHG emission target of -14 % compared to 2005, but does not yet contain additional policies and measures to reach the 2030 non-ETS target and the domestic GHG targets.

Plan does not set any quantitative targets for reducing emissions in the transport and buildings sectors by 2030.

Share of energy from renewable sources in gross final consumption of energy (%)

16.2% (2019)

13%

22% (under 6 percentage point annually)

Low ambition (target below 23% according to effort sharing regulation)

Renewable share in transport sector

7.8% (2019)

10.8%

14% (under 9 percentage point annually)

Low ambition (minimum target chosen) Insignificant increase of RES foreseen by 2030, Lack of planning measures for integration of large amounts of renewable electricity.

No sufficient action was taken in order to prepare for increased use of biomass in Transport and heating sectors.

Renewable share in electricity

14.1% (2019)

13.5%

17% (under 4 percentage point annually)

Low ambition No targets for infrastructure and the access rules to support Smart grid and development of decentralized small renewable energy generation.

Renewable share in heating and cooling

22.7% (2019)

15.5%

31% (under 1 percentage point annually)

Low ambition (according to IEA) Problematic and not sustainable support of bioenergy. No specific targets for largescale biomass heating systems.

National contribution for energy efficiency: • Primary energy consumption (Mtoe) • Final energy consumption (Mtoe)

• •

40.4 (2018) 25.3 (2018)

• •

44.3 23.9

• •

41.3 23.7

• Low • Modest Lack of specific investment into future-proof physical infrastrucutre.

Low target for smart grid development.

Source:

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Czechia - Green Transition Czechia economy relies on fossil fuel CO2 intensity per GDP* in the Czechia and selected IEA countries, 2000-19

• Significant reliance on coal while high share of manufacturing 1

• Coal production important economic activity in three regions (socially-just transition important) 1 • Third largest coal producer in EU, coal exit is scheduled for 2038 • Low level of energy efficiency 1 * GDP data are in billion USD 2015 prices and purchasing power parity (PPP) ** IEA30 is the equivalent of a weighted average of 30 IEA countries

Image source: IEA, 20212

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Czechia – Green transition Czechia has one of the highest emission intensities per capita in EU • With 12.2T GHG (EU average of 8.5 in 2018), Czechia has one of the highest emission intensities per capita in EU. 1

Total final consumption per sector and per fuel in the Czechia, 20192

• In 2019, around 75% of the emissions were generated by energy, followed by industrial processes and product use (12%), agriculture (6%) and waste management (4%) 1 • Carbon prices in Czechia are too low to make an impact on climate without a carbon tax. 1 • In 2018, only €25 million in pollution and resources taxes were collected (lowest amounts in the EU and only about half of the amount collected in 2010) 1

Oil is the main source of TFC, accounting for one-third of the total, followed by natural gas and electricity at about one-fifth each * Industry includes non-energy demand Image source: IEA, 20212

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Investment climate and structural challenges in Czechia Generally high level of investment in Czechia:

Overall multiannual implementation of 2011- 2019 Country Specific Recommendations up to date in CZ1

•

Factors driving CZ economy in last decade: Foreign Direct Investment, trade openness, proximity to core EU markets, wage competitiveness and inflow by EU Funds 1

•

CZ has one of the highest investment levels in the EU (26.7% of GDP in 2004-18) 2

•

Level of public investment one of the highest in the EU (5% of GDP on average) in 2000-172

2020 European Semester Report lists several factors which inhibit green investments: • Low levels of investments into (sustainable) transport, the low-carbon energy sources alongside low innovation investments, and labour and skill shortages as the key obstacles for Czechia’s green transition • Lack of strategic plans and financing measures, political leadership, as well as public support for a transition away from fossil fuels

Full No Progress 7% implementation 7%

Limited progress 34%

Substantial progress 20%

• Large regional differences • Responsibility for energy efficiency policies is split between various authorities, hindering the development of clear and coordinated strategies for energy efficiency projects • Both the building sector and industry lack awareness and motivation for energy efficiency projects, citing the high administrative burdens as well as long payback times as major barriers

Some progress 32% Data source: European Commission, 20202

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Czechia – availability of finance predominantly no major obstacle

Factors impacting long-term investment decisions: availability of finance: CZ and EU countries, 20181

45.0

Data source: EIB, 20181

40.0

35.0

30.0

25.0

According to 2018 EIB

Investment survey 1,

20.0

15.0

availability of finance is not major obstacle hindering long-term investments decisions in CZ

10.0

5.0

0.0 All

Construction

Infrastructure

Manufacturing

Services

CZ - Availability of finance - Major obstacle

CZ - Availability of finance - Minor obstacle

EU Average: Availability of finance - Minor obstacle

EU Average: Availability of finance - Major obstacle

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Different estimations of investment needs to reach CZ (now outdated) 2030 targets Closing the investment gap will require additional action: •

NECP 20191

Valentová et al.

(2020) 2

ICF Gap Assessment3

EE building

-

6.9

19.2

RES building

-

5.9

0.5

RES for electricity

1.1

5.3

0.5

Investment needs assessment and

RES in heat production

1.1

5.6

1.1

estimations to reach 2030 targets

Combined Heat and Power production & district heating

-

-

0.7

RES transport

-

2

Power plants and accumulation

16.7

-

16.4

Power distribution

7.2

-

7.1

Power Transmission

2.1

-

2.1

-

-

1.2

28.1

25.6

29.5

Based on the NECP, Valentová et al.

(2020) and the analysis conducted by ICF following categories were defined

•

differ among different studies (see table as example)

•

Billion EUR, 2021-2030

Many sectors do not have detailed calculations on their investment needs or lack distinction between public and private sector

Total investments needs to reach the 2030 targets

Industry (under ETS and non-ETS) Total

Data source: European Commission, NECP 2019, Valentová 2020, ICF 2020

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Czechia – Climate and energy investment gap Climate and energy investment gap for Czechia, 20171 Buildings and renewable energy supply and infrastructure (CZK bn)

Image source: Valentová et al. 2019

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Czechia - NECP General strategy to decarbonize 2019 Czech NECP1 based on two main national strategic document: the State Energy Policy2 (approved in 2015) and the Climate Protection Policy (approved in 2017) GHG emissions

Renewable Energy

Energy Efficiency

Energy Security

Internal Energy Market

Reduce total emissions by 30% by 2030 compared to 2005 (44 million tonnes CO2)

22% contribution in gross final consumptio n by 2030

Primary energy sources at 1 735 PJ in 2030, final consumption at 990 PJ and energy intensity of GDP at 0.157 MJ/CZK

Based on emissions projections: 34% emissions reduction compared to 2005 will be achieved

The average year-on-year growth of RES share in heating and cooling is proposed at 1%.

Based on the targets and policies contained in the State Energy Policy

Maintain No specific import/export quantifiable capacity of the targets transmission system (amongst others) for 2030 in proportion to maximum load of at least 30/35% (=15% target in terms of installation performance)

Commitment to achieve energy savings in buildings with low energy performance of these institutions of 124 TJ, in accordance with the rules of the Energy Efficiency Directive & cumulated energy savings of 462 PJ

Research, Innovation & Competitiveness

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Czechia – NECP - Commission Assessment • Renewable energy: increase of 1.2 percentage points over the draft plan, but is considered unambitious as it is below the share of 23% by 2030 resulting from the

Targets for GHG emission reduction set in the NECP indicate a low level of ambition for a low-carbon transition

formula in Annex II to Regulation (EU) 2018/19991 • Increased share of electricity consumption from renewable sources to 16.9% by 2030: significant slow-down compared to 2010-20181 • Heating and cooling: annual increase of 1.0 percentage of share of renewable energy below the indicative 1.1% set out in Renewable Energy Directive2

• Energy Efficiency: low level of ambition for primary energy consumption and modest for final energy consumption1 • Policy measures described clearly, but unclear whether sufficient to attain targets1 • "energy efficiency first" principle not explicitly applied1 19

Commission Assessment of CZ National Energy and Climate Plan • Energy security: plan outlines the envisaged reform in • Plan addresses interactions with air quality the electricity sector as well as some measures aimed at and emissions policy notably promoting a better integration of renewables at • Projections for emissions of five pollutants favouring the active role of prosumers and consumers also provided (following the recommendation on the draft NECP) • Research, development and innovation: no specific • Correspondence between the scenarios quantifiable targets / Research areas relating to energy considered in this assessment and in the and climate covered in overall national research overall NECP not entirely clear priorities • Just and fair transition: no assessment of • No information about total amount of investments social, economic and skills impact of needs to implement NECP until 2030. transitions • Strengthened by "Coal Commission" • No impact assessment of planned policies and measures.

• Czechia consider level of energy poverty very low, does not propose any specific measures • List of renewable and fossil fuel subsidies: largely • Final NECP partially addresses most of the consistent with categories identified in Commission Commission's recommendations analyses on energy subsidies (No specific figures for fossil fuel subsidies) 20

Czechia – Assessment of investment needs as presented in NECP NECP: Total investments needs1 Operating aid for RES and other supported sources Total investment need in energy efficiency Of which Public aid in energy efficiency Investments in CZ power system (Power plants and accumulation, distribution, transmission)

Data source: NECP 2019

Billion Eur, 2021-2030

Assessment investment need representation in NECP1: •

Untransparent and incomplete investment needs and gaps analysis in NECP does not contribute to creation of sustainable project pipeline in CZ

20.2

•

Missing and unclear information of role of private sector as well as total investment need

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•

Covers only operating aid for RES, energy efficiency and power system investments

•

Missing analysis for other sectors / programmes

•

European Court of Auditors: “Total investments estimated; no general overview of investment needs and funding; no information on market risks.”2

•

Transition away from fossil fuels: €25 bn (CZK 625 bn) by 2050, 12% of GDP at 2018 price, about €833 mln (CZK 20.8 bn) p.a.

6

25

•

But: Figures for 2050 do not cover the numbers provided in the final NECP

•

Private investors will face massive challenge in providing investments flows into RE sector as well as building sector

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Czechia’s Recovery and Resilience Plan Key information

• Size: €7.036 bn1 (CZK 180 billion) grouped in 26 components, plus €0.44 bn (CZK 11.3 bn) to be funded from national sources • Coordination: a dedicated department under the Ministry of Industry and Trade + Steering Committee has been established as the key decision-making, monitoring and supervision structure • Pillars of Czechia’s RRP2 (1) promoting entrepreneurship and innovation; (2) implementing growth-enhancing measures by focusing on research, development and innovation and strengthening infrastructure resilience; (3) increasing the efficiency of the use of natural resources and preventing the damage caused by the consumption of natural resources and the production of pollutants.

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Czechia’s Recovery and Resilience Plan - overview #-

Components relevant to green transition

Climate contribution

investments & reforms contribute to the pillar “Green transition” (COM assessment1)

7-15

Physical infrastructure and green transition

€3.26 bn

7

2.1 Sustainable and safe transport

€0.94 bn

€0.55 bn (58.3%)

significantly

8

2.2 Reduction of energy consumption in the public sector

€0.36 bn

€0.36 bn (100%)

significantly

9

2.3 Transition to cleaner energy sources

€0.26 bn

€0.26 bn (100%)

Significantly

10

2.4 Developing clean mobility

€0.19 bn

€0.19 bn (100%)

Partially

11

2.5 Building renovation and air protection

€0.63 bn

€0.62 bn (97.4%)

Significantly

12

2.6 Nature protection and climate change adaptation

€0.54 bn

€0.42 bn (77.1%)

Partially

13

2.7 Circular economy and recycling and industrial water

€0.14 bn

€0.09 bn (66.7%)

Significantly

14

2.8 Brownfields

€0.13 bn

€0.05 bn (40%)

Significantly

15

2.9 Promotion of biodiversity and drought issues

€0.12 bn

€0.06 bn (53.8%)

Partially

Other components 1-6

Digital transformation

€1.1 bn

-

-

16-18

Education and labour market

€1.6 bn

-

-

19-22

Institutions, regulation and business support

€0.25 bn

-

-

23-24

Research, development and innovation

€0.32 bn

-

-

25-26

Health and resilience of population

€0.49 bn

-

Data source: EU Commission Assesment

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Czechia’s Recovery and Resilience Plan Commission Assessment • COM confirms share of 41.6%, but the allocation attributed to climate-related actions appears only partially satisfactory • Costing information and supporting documents are provided to a medium extent and provide a sufficient basis to assess the reasonability and plausibility of cost estimates.

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Czechia’s Recovery and Resilience Plan Based on outdated targets and strategies, the plan fails to bring CZ on track to reach 2030 targets Assessment by Green Recovery Tracker (2021)

• Plan focuses mostly on investments, only few reforms • Synergies with other EU funding not adequately highlighted • Main reference: CZ’s NECP and other national plans → Shortcomings of NECP filter through in RRP

Image source: Green Recovery Tracker, 20211

→ NECP and other documents not aligned with updated 2030 target and neither with the previous 40% target → Missed chance to revise outdated strategies, which would have been necessary to reach climate neutrality • Renewables, clean transport and energy efficiency addressed, but more complex issues (e.g. biodiversity) not highlighted

• Climate spending: Self-declared in RRP: 41.6%, confirmed by COM assessment → Analysis by Green Recovery Tracker: 25% - 15% may have a positive or negative impact on the green transition depending on the implementation of the relevant measures • DNSH: Replacement of coal-based boilers by gas-based boilers possible • Hardly any public consultation (plan only made public in late March)

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Czechia - Cohesion Policy Priorities 2021-2027 Priorities of Cohesion policy 20212027 1 (Five objectives of the main EU investment policy in the Czechia.)

Image source: DotaceEu.cz, 2021

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Czechia - Cohesion Policy Priorities 2021-2027 Priorities of Cohesion policy 20212027 1 (Five objectives of the main EU investment policy in the Czechia.)

Image source: DotaceEu.cz, 2021

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(estimation)

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Annex – Footnotes, Abbreviations & Glossary Project Background & Introduction Slide 1 2 3 4 5 6 7 8 9

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Footnotes and sources Sources: 1 WorldBank, Population, total - European Union, Czech Republic, 2020, https://data.worldbank.org/indicator/SP.POP.TOTL?locations=EU-CZ 2 WorldBank, GDP per capita (current US$) - European Union, Czech Republic, 2020, https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=EU-CZ 3 WorldBank, GDP (current US$) - European Union, Czech Republic, 2020, https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=EU-CZ 4 Statista, Czech Republic: Distribution of gross domestic product (GDP) across economic sectors 2010 to 2020, 2020, https://www.statista.com/statistics/369830/share-of-economic-sectors-inthe-gdp-czech-republic/ Source: 1 European Commission, Commission’s Summer interim Forecast (2021) (COM*), 2021 https://ec.europa.eu/commission/presscorner/detail/en/IP_21_3481 Sources: 1. Czech government, Draft National Energy and Climate Plan of the Czech Republic, 2018, https://ec.europa.eu/energy/sites/default/files/documents/cs_final_necp_main_en.pdf 2. European Commission, Staff Working Document: Analysis of the recovery and resilience plan of Czechia, 2021 https://ec.europa.eu/info/sites/default/files/com-2021-431_swd_en.pdf Sources: 1 European Commission, European Semester Country Report: Czech Republic 2020, 2020, https://ec.europa.eu/info/sites/info/files/2020-european_semester_country-report-czechrepublic_en.pdf 2 IEA, Czechia 2021: Energy policy review, 2021 https://www.iea.org/reports/czech-republic-2021 Sources: 1 European Commission, European Semester Country Report: Czech Republic 2020, 2020, https://ec.europa.eu/info/sites/info/files/2020-european_semester_country-report-czechrepublic_en.pdf 2 IEA, Czechia 2021: Energy policy review, 2021 https://www.iea.org/reports/czech-republic-2021

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Sources: 1 European Commission, Commission Staff Working Document, Analysis of the RRP of Czechia, 2021 https://ec.europa.eu/info/sites/default/files/com-2021-431_swd_en.pdf 2 European Commission, European Semester Country Report: Czech Republic 2020, 2020. https://ec.europa.eu/info/sites/info/files/2020-european_semester_country-report-czechrepublic_en.pdf Sources: 1 Own calculations based on EIB Investment Survey – Tracking investment needs and constraints across Europe, 2018, https://data.eib.org/eibis/index;jsessionid=405961543842CDEFB80BC8CDF0BD2B5A Sources: EU budget typically contains European Structural and Investmnet FUND, European Fund for Strategic Investment, Modernization Fund, Innovation Fund, funds from selling emissions allowances, EIB, EBRD. 1. NECP (Total Investment): https://ec.europa.eu/energy/sites/ener/files/documents/cs_final_necp_main_en.pdf 2. Valentová et a.(annual Investment made into total (*10 years) : https://www.ikem.de/wp-content/uploads/2020/03/Valentova-et-al.-2020.-Investment-need-analysis-in-Czechia_ExecutiveSummary_in-English.pdf 3. ICF gap assessment (Not Specified, looks like annual investment) : https://www.mzp.cz/C1257458002F0DC7/cz/analyza_icf/$FILE/OFDN-SRSS_1_gap_assessment-20201102.pdf https://climandcomorg.sharepoint.com/sites/CZCountryAssessment/Freigegebene%20Dokumente/General/Literature%20general/NECP/staff_working_document_assessment_necp_czechia_en.pdf?CT=1632717368398&OR=ItemsView Calculation for NECP 2019: RES heat production: Biomass boilers and stoves, heat pumps, solar collectors (25,89 Billion CZK-> 1.035,6 Million Euro) RES for electricity: solar plants-areas, solar plants-buildings wind power plants (25,73 Billion CZK-> 1.029,2Million Euro) RES for building: biomass boilers and stoves, heat pumps, solar collectors, solar plants-buildings (38,68 Billion CZK-> 1.547,2 Million EURO) Power plants and accumulation (418 Billion CZK -> 16.720 Million EURO) Power Distribution (181 Billion CZK -> 7.240 Million EURO) Power Transmission (52 Billion CZK -> 2.080 Million EURO) For the ICF Gap Assesment numbers were taken from Table 5.1 Overview of investment needs across MF sectors Sources: 1 Valentova et al., 2019 https://www.ikem.de/wp-content/uploads/2020/03/Valentova-et-al.-2020.-Investment-need-analysis-in-Czechia_Executive-Summary_in-English.pdf 1. National Energy and Climate Plan of the Czech Republic, 2019 https://ec.europa.eu/energy/sites/ener/files/documents/cs_final_necp_main_en.pdf 2. State Energy Policy, 2o15 https://www.mpo.cz/assets/en/energy/state-energy-policy/2017/11/State-Energy-Policy-_2015__EN.pdf 3. Climate Protection Policy, 2017 https://unfccc.int/files/na/application/pdf/cze_climate_protection_policy_summary.pdf Sources: 1. Czech Ministry of Industry and Trade, Long-term renovation strategy to support the renovation of the national stock of both public and private residential and non-residential buildings, 2018 https://ec.europa.eu/energy/sites/default/files/documents/cz_2020_ltrs_official_translation_en.pdf 2. Šance pro budovy, DLOUHODOBÁ STRATEGIE RENOVACE BUDOV V ČESKÉ REPUBLICE, 2021 https://sanceprobudovy.cz/wp-content/uploads/2020/06/strategie-renovace-a-adaptace-budovkveten-2021.pdf

20 21

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23

24 25 out

26 27

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Sources: 1. Government of the Czech Republic, National Energy and Climate Plan (NECP), 2019 https://ec.europa.eu/energy/sites/default/files/documents/cs_final_necp_main_en.pdf 2. Czech Republic Supreme Audit Office, EU Report 2018: Report on the Financial Management in the Czech Republic, 2018 https://www.nku.cz/assets/publications-documents/eu-report/eureport-2018-en.pdf Sources: 1 European Commission, Commission Staff Working Document: Analysis of the recovery and resilience plan of Czechia, 2021 https://ec.europa.eu/info/sites/default/files/com-2021431_swd_en.pdf 2 Government of the Czech Republic, Czech Recovery and Resilience Plan, 2021 http://www.planobnovycr.cz/ Sources: 1 European Commission, Commission Staff Working Document: Analysis of the recovery and resilience plan of Czechia, 2021 https://ec.europa.eu/info/sites/default/files/com-2021431_swd_en.pdf Source: 1 Green Recovery Tracker, Czech Republic Country Report, 2021. https://www.greenrecoverytracker.org/ Sources: 1 DotaceEU.cz, Programming period 2004-2006, https://www.dotaceeu.cz/en/evropske-fondy-v-cr/programove-obdobi-2004-2006-(1) 2 DotaceEU.cz, Programming period 2007-2013, https://www.dotaceeu.cz/en/evropske-fondy-v-cr/programove-obdobi-2007-2013 3 DotaceEU.cz, Programming period 2014-2020, https://www.dotaceeu.cz/cs/statistiky-a-analyzy/cerpani-v-obdobi-2014-2020 4 European Commission (2020). European Semester Country Report: Czech Republic 2020. https://ec.europa.eu/info/sites/info/files/2020-european_semester_country-report-czechrepublic_en.pdf 5 Library of the European Parliament, The (low) absorption of EU Structural Funds, 2013 https://www.europarl.europa.eu/RegData/bibliotheque/briefing/2013/130544/LDM_BRI(2013)130544_REV1_EN.pdf 6 Bruegel, Blog post: Will European Union countries be able to absorb and spend well the bloc’s recovery funding?, 2020 https://www.bruegel.org/2020/09/will-european-union-countries-be-ableto-absorb-and-spend-well-the-blocs-recovery-funding Sources: 1 DotaceEU.cz, Priorities for 2021-2027, 2021 https://dotaceeu.cz/getmedia/f37e8b1e-c9c3-45fc-bb7f-a093a61e731b/Priorities_PP21_27.pdf.aspx?ext=.pdf Sources: 1 DotaceEU.cz, Priorities for 2021-2027, 2021 https://dotaceeu.cz/getmedia/f37e8b1e-c9c3-45fc-bb7f-a093a61e731b/Priorities_PP21_27.pdf.aspx?ext=.pdf Source: DotaceEU.cz, European Funds after 2020, 2020 https://dotaceeu.cz/getmedia/b0feb716-6d44-400f-be8b-4ac044c1505a/Evropske-fondy-v-CR-po-roce-2020-WEB_2.pdf.aspx?ext=.pdf DotaceEU.cz, Main objectives for the programming period 2021-2027, 2020 https://dotaceeu.cz/getmedia/2caca91a-2182-473b-872d-96268f55b46f/Cile-politiky-soudrznosti-a-tematicketabulky.pdf.aspx?ext=.pdf

29

30

Source: DotaceEU.cz, European Funds after 2020, 2020 https://dotaceeu.cz/getmedia/b0feb716-6d44-400f-be8b-4ac044c1505a/Evropske-fondy-v-CR-po-roce-2020-WEB_2.pdf.aspx?ext=.pdf DotaceEU.cz, Main objectives for the programming period 2021-2027, 2020 https://dotaceeu.cz/getmedia/2caca91a-2182-473b-872d-96268f55b46f/Cile-politiky-soudrznosti-a-tematicketabulky.pdf.aspx?ext=.pdf -

Acronyms BAU

Business as Usual

BEV

Battery electric vehicle

BIK

Benefit in kind

CAPEX

Capital Expenditures

CC

Carbon Capture

CCU

Carbon Capture and Use

CCUS

Carbon Capture, Use and Storage

CCS

Carbon Capture and Storage

CCfD

Carbon Contract for Difference

CDA

Carbon Direct Avoidance

CEE

Central and Eastern European region

CEF

Connecting Europe Facility

CF

Cohesion Fund

COM

European Commission

CSP

Clean Steel Partnership

CZ

Czechia / Czech Republic

DNSH

Do no significant harm principle

EA

Emission Allowances

ECSC

European Coal and Steel Community

EED

Energy Efficiency Directive

EIB

European Investment Bank

EPBD

Energy Performance of Buildings Directive

ESF+

European Social Fund

ESIF

European Structural and Investment Funds

ERDF

European Regional Development Fund

EU ETS

EU Emissions Trading System

GBS

Green Bond Standard

H2

Hydrogen gas-powered vehicles

ICE

Internal combustion engine

IEA

International Energy Agency

JTF

Just Transition Fund

LTRS

Long-term Renovation Strategy

MFF

Multiannual Financial Framework

MoIT / MPO

Ministry of Industry and Trade

MWt

Megawatt thermal

NACE

Nomenclature of Economic Activities

NECP

National Energy and Climate Plans

NG

Natural Gas (fossil gas)

NGEU

Next Generation EU

OPEX

Operating Expenditures

PHEV

Plug-in hybrid electric vehicles

R&D

Research and development

RRF

Recovery and Resilience Facility

RRP

Recovery and Resilience Plan

SMEs

Small and medium-sized enterprises

TA

Technical Assistance

TCP

Technology Collaboration Programme

TEN-E

Trans-European Networks for Energy

TEN-T

Trans-European Transport Network

TJTP

Territorial Just Transition Plan

TWh

Terawatt hours

VAT

Value added tax

ZEV

Zero-emission vehicle

Definitions Agrivoltaics

This technology generates renewable electricity through large ground-mounted photovoltaic systems installed on farmland that is simultaneously used for food production. It has the potential to reduce land competition through a dual use of the land. With a suitable technical design, agrivoltaics can increase resilience of crops and agricultural yields beyond just improving land use efficiency.

Blast Furnace

BF

Blended Finance Instruments

Integrated blast furnace is a type of metallurgical furnace used for smelting to produce industrial metals, generally pig iron, but also lead or copper.

The strategic use of finance to attract or mobilize additional funds through other EU financial instruments, member state co-financing, or private sector investment to achieve policy objectives. Instruments are often designed to provide financial safety nets or hedge certain risks through e.g. credit insurance facilities.

Buildingintegrated photovoltaics

BIPV

Building components which fulfil classic functions such as thermal insulation, protection against wind and weather or also architectural functions, in addition to generating electricity.

Basic Oxygen Furnace

BOF

A vessel used to convert pig iron into steel

Building BPIE Performance Institute Europe

A thinktank on the sustainability and decarbonization of the building sector, founded by the European Climate Foundation and partly funded by Horizon.

Battery Electric Vehicle

BEV

Also called, all-electric vehicle, only electric vehicle, pure electric vehicle, or zero-emission vehicle (ZEV). BEVs use chemical energy stored in rechargeable batteries without secondary sources of propulsion. They do not use internal combustion engines (ICEs) but electric motors or motor controllers. Often BEV refers to light-weight automobiles, but can also include bikes, vans, trucks, etc.

Business-AsUsual Scenario

BAU

A baseline scenario that examines the consequences of continuing development of current trends in e.g. the economy, demographics, technological innovation, climate change and human behaviour.

Often refers to an outcome of a scenario analysis, e.g. as a contrast to the outcomes of EUCO scenarios.

Carbon contracts CCfDs for difference

CCfDs are policy instruments for supporting the deployment of new ultra-low carbon projects by ensuring a guaranteed carbon price to

make up the cost-difference relative to a reference technology. They can be designed to reduce the up-front investment cost for developers, give creditors a higher security for their loans and minimize the downstream costs for consumers. CCfDs work to accelerate R&D and ensure new innovative low carbon/deep decarbonization technologies become commercially viable sooner relative to conventional technologies and have a shorter time period required for commissioning.

Carbon pricing

Carbon capture, utilization and storage

Putting a price on carbon that captures the external costs caused by their emissions. Carbon prices can be set via taxation or cap-andtrade schemes.

CCUS

Circular economy

Cleaner Transport Facility

Carbon capture and storage (CCS) and carbon capture and utilization (CCU) technologies that aim to capture CO2 emissions from point sources, such as industrial sources, to prevent emissions from entering the atmosphere.

The purpose of a circular economy is to decouple economic growth from the consumption of non-renewable resources. It is a method of economic development that benefits enterprises, society and environment because of its restorative and regenerative characteristics. The circular economy can be achieved via new resource management systems, nutrient flow systems and reverse logistics systems, which makes it possible to return, classify and reuse products. A circular economy follows the 3R principle of Reducing, Reusing and Recycling materials.

CTF

Initiative of the EIB to support the funding of the development and deployment of cleaner vehicles and their needed infrastructure. It is a one-stop shop that provides technical assistance and access to transport-related loans of the EIB itself and grants, loans, debt guarantees of CEF, TEN-T, Horizon and through JASPERS (technical assistance) and ELENA (technical assistance).

Combined heat and power

CHP

Also known as cogeneration, this implies that heat and electricity are produced simultaneously in one process. Use of combined heat and power helps to improve the overall efficiency of electricity and heat production as these plants combine electricity production technologies with heat recovery equipment.

Component (RRF context)

Recovery and Resilience Plans should be composed of reforms and investments grouped into components. A component is a constituent element or a part of the RRP. Each component should reflect related reform and investment priorities in a policy area or related policy areas, sectors, activities or themes, aiming at tackling specific challenges, forming a coherent package with mutually reinforcing and complementary measures.

Concessional loans

Also known as “patient debt”, these are loans that allow more flexibility on the part of the borrower, often in terms of longer maturities, longer grace periods, lower collateral requirements, subordinated debt or technical assistance. Concessional loans are often issued by financial non-governmental organizations or development banks as opposed to commercial banks.

Deep renovation

Achieve a 60% reduction of energy demand in a given building, as compared to 30% for shallow renovations and 40% for medium renovations.

Digital target (RRF context)

Each Recovery and Resilience Plan should allocate at least 20% of the total plan allocation to digital measures.

District heating system

DH

A system where heat is distributed from a central point through a network of insulated pipes fed by various heat sources, such as heat from heat and power plants, excess heat from industry, and heat from fossil combustion. In the future, district heating may be fed by heat and power plants fuelled by (sustainably produced) biomass, surplus heat from industry, and a combination of other renewables such as solar, geothermal, or heat pumps.

Do it yourself (building renovation context)

DIY

Do no significant DNSH harm principle

The DIY market aims to help customers improve their home without the need for any extra professional help. Oftentimes, these renovations are shallow, low-quality, step-by-step renovations that do not make a substantial difference in lowering energy use of a home.

Principle under the EU Sustainable Finance Taxonomy: there are six environmental objectives to which no significant harm should be done: (i) climate change mitigation, (ii) climate change adaptation, (iii) water and marine resources, (iv) the circular economy, (v) pollution prevention and control, and (vi) biodiversity and ecosystems. For the RRF, technical guidance has been published on the application of the principle.

Direct Reduced Iron

DRI-C/H Iron ore in the form of lumps, fines or pellets that has the oxygen removed by using hydrogen (H) or carbon monoxide (C)

Electric Arc Furnace

EAF

A furnace that heats material by means of an electric arc, especially for steel-making

Energy Service Company

ESCO

Companies that supply and install equipment that incur energy savings. ESCOs can also arrange the financing of their operation, sometimes tying their level of success to their renumeration.

EURO 7

European Fund for Strategic Investment

European emissions standards for petrol and diesel cars. Rounds of proposals and feedback have been completed for a revision and Commission adoption is planned for Q4 of 2021.

EFSI

European EIB Investment Bank

Also known as the Juncker Plan. Initiative launched in 2015 by the EIB Group and the COM to boost the economy by mobilizing private financing for strategic investments.

The long-term lending institution of the EU; a public bank owned by the 27 member states, shared based on economic weight at the time of member state accession. Its activities are funded via bond issuance in international capital markets.

EU Climate Law

Aims to write into law the goal set out in the European Green Deal – namely, for Europe’s economy and society to become climate-neutral by 2050.

European Semester

ES

An annual cycle of coordination and monitoring of the EU’s economic policies and national budgets.

EU Emissions Trading System

EU ETS

A cap-and-trade system administered by the EU. Consists of carbon emissions ceilings (caps) that are lowered over time. Companies can buy or sell emission allowances, trading them when needed.

Electric Vehicle

EV

An electric vehicle uses one or more electric motors for propulsion.

Can include only electric motors or battery electric vehicles (see BEV) or combustion motors or plug-in hybrid electric vehicles (PHEV).

Flagship

As used in this assessment context, taken as country-specific recommendations for future key transformative investments and policy reforms that can be used to accelerate climate action

(New) Green Savings Programme

(N)GS

The Czech Ministry of the Environment administers this energy savings program in family houses and apartment buildings funded by the State Environmental Fund of the Czech Republic. It supports the reduction of the energy intensity of residential buildings (complex or partial thermal insulation), construction of houses with very low energy intensity, environmentally friendly and efficient use of energy sources and renewable sources of energy (RES).

Greenhouse gases

GHG

Gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and emit radiation, which together causes the greenhouse effect. Water vapour, carbon dioxide, nitrous oxide, methane, and ozone are the primary GHGs in the Earth’s atmosphere.

Grant

Grants are non-repayable funds that are given from a government, foundation, corporation to a recipient, for specific projects for reimbursement of necessary costs. Grants often require some level of conditions and mandatory reporting of activities and results.

Green hydrogen

Hydrogen that is produced with sustainable energy, most often through electrolysis where water is split into hydrogen and oxygen.

Green Public Procurement

A voluntary instrument streamlining and promoting the sustainable production and consumption of goods and services by the EU’s public institutions with comprehensive and verifiable environmental criteria.

Green Bonds

A fixed-income instrument to finance climate-related or other environmental projects, often linked to specific assets like hydropower projects. The first green bonds were issued by the World Bank in 2009. They are often combined with tax incentives to make them a relatively attractive investment. The sustainability of green bonds is verified by third parties.

Financial Guarantee

A financial commitment of third-party (guarantor) to repay a percentage of losses in case a borrower cannot honour his repayments to a credit provider, both interest and principal components. Guarantees are insurance policies that often allow investors some financial breathing space to invest a larger share of their funds.

Heat pump

HP

Investment

Internal Combustion Engine

Device used to heat or cool building by transferring thermal energy from a warmer to a cooler place or vice versa.

The RRF uses a broad concept of investment as capital formation in areas such as fixed capital, human capital and natural capital. This would also cover for instance intangible assets such as R&D, data, intellectual property and skills.

ICE

Heat engine in which the ignition and combustion of and fuel occurs within the engine itself, i.e. with an oxidant (usually air) to convert the energy from combustion chamber that is an integral part of the working fluid circuit. ICE can be powered with fossil fuels, biofuels or e-fuels.

Important Projects of Common European Interest

IPCEI

Special projects that can promote the innovation of a specific technology up to industrial scale on the basis of a common European interest. This allowance is rather new as innovations are generally only regionally allowed as R&D projects to avoid unfair competition between MS. IPCEI’s are currently limited to microelectronics and batteries but an IPCEI for hydrogen technology is being implemented.

Lead market

In innovation theory, a first sub-market where a specific innovation can be early adopted to spur adoption also by other “lag” markets, e.g. by internationalization. Policies to create lead markets are focussed on creating demand for a specific technology or concept.

Lock-in effects

Lock-in effects come into play when there are substantial costs or other barriers for consumers to get a similar product or service from another vendor. Consequently, consumers or businesses become dependent on one provider. Furthermore, lock-in effects may create serious barriers to market entry, therefore undermining fair competition.

Long-term renovation strategy

LTRS

Strategy enacted by the EU (Directive 2010/31) to support the renovation of Member States’ national stocks of residential and nonresidential buildings, both public and private, into a highly energy efficient and decarbonised building stock by 2050, facilitating the cost-effective transformation of existing buildings into nearly zeroenergy buildings.

Minimum Energy MEPR Performance Regulations

Performance requirements for any energy-using technology, effectively limiting the amount of energy that may be used for a particular task.

Minimum Energy MEPS Performance Standards

Regulations that require buildings to meet a minimum performance standard, specified in terms of a carbon or energy rating or minimum renovation measures, by a certain deadline or at a certain point in the natural life of the building, e.g. at the time of sale or when other construction work is undertaken.

Mobility as a Service

MaaS

Denotes a shift away from personally owned modes for transportation towards shared vehicles that can be booked, planned through joint digital channels. Examples for urban mobility include the business models of companies like Uber and Lyft.

Multiannual Financial Framework

MFF

Also called the financial perspective, the MFF is a 7-year framework regulating the EU’s annual budget by setting ceilings of spending for broad policy themes.

National Energy and Climate Plans

NECP

EU countries needed to establish a 10-year integrated national energy and climate plan (NECP) for the period from 2021 to 2030 to show how they meet the 2030 energy and climate targets (within the Energy Union governance).

Next Generation NGEU EU

The temporary instrument designed to boost the recovery from the COVID-19 pandemic, includes the recovery and Resilience Facility

One-stop shop

A facility or location where a “customer” can get all the help they need in one go to reach a certain goal, delivered by one provider at a clear central location with low administrative barriers.

Plug-in Electric Vehicle

PEV

Includes battery electric vehicles and plug-in hybrid electric vehicles.

Road vehicles that be charged with external sources of electricity, stored in battery packages.

Plug-in Hybrid Electric Vehicle

PHEV

Hybrid electric vehicle that uses batteries to power an electric motor and another fuel, such as gasoline, to power an internal combustion engine (ICE).

Power Purchasing Agreement

PPA

PPAs are long-term contract where a business or public entity agrees to purchase electricity directly from an energy generator, with agreed price terms for the sake of financial stability often for a period of 15 to 25 years.

Quasi-equity

Quasi equity instruments are long-term financial instruments, with multiple variants that fall between debt and equity, including

subordinated loans, convertible bonds and preferred stocks. Can be more complicated and costly to administer.

Recovery and Resilience Facility

RRF

Makes €672.5 billion in loans and grants available to support reforms and investments undertaken by EU countries with the aim to mitigate the economic and social impact of the coronavirus pandemic and declared objective to make economies and societies more sustainable, resilient and better prepared for the challenges and opportunities of the twin transition

Recovery and Resilience Plan

RRP

Every Member States wishing to access recovery funding under the RRF has to prepare a Recovery and Resilience Plan.

Reform (RRF context)

An action or process of making changes and improvements with significant impact and long-lasting effects on the functioning of a market or policy, the functioning or structures of an institution or administration, or on progress to relevant policy objectives, such as growth and jobs, resilience and the twin transitions.

Renovation Wave

Comprehensive EU strategy put forward by the EC in 2020 to support climate neutrality, economic recovery through actions in building sector with detailed list of policies, measures and tools that must be put in place to overcome existing barriers to renovation and mobilize all actors, including citizens, local authorities, investors and the construction industry. The strategy has a dual ambition of energy gains and economic growth and aims to double annual energy renovation rates in the next 10 years.

Repayment grant

Grant repayment, i.e. if the project achieves a certain energy performance level.

Retrofitting

Process of adding something new to the original building or structure, aiming to improve the functionality of the building by adding new technology, building systems or equipment, such as heating systems,

but it might also refer to the fabric of a building, for example, retrofitting insulation or double glazing.

Scenario

Explain use of scenarios?

SECAP

Sustainable Energy and Climate Action Plan; local authorities which join the Covenant of Mayors for Climate and Energy – Europe initiative commit to submitting an action plan within 2 years of signup. This action plan is a key implementation tool. It defines mitigation and adaptation goals and is based on a Baseline Emission Inventory and a Risk & Vulnerability Assessment, which provide an analysis of the current situation.

Shallow renovation

A building renovation that is performed quite often (rate of 3%) with an average energy efficiency ambition level reduction of 32% (in energy use for space heating by 2050 compared to 2010), may fail to treat the building envelope as a whole, and includes a low use of renewable energy. This type of renovation misses both environmental targets (CO2-emission and final energy savings) while not providing substantial economic advantage compared to a deep renovation.

Soft Loan

Loans with no interest or below-market rate of interest. May also have lenient terms, such as extended grace periods or interest holidays. OFten used to encourage investment supporting energy policies and are often complementary to subsidies of fiscal incentives.

Small and medium-sized enterprises Structural reforms

SMEs

SME status depends on both the size and resources of a private enterprise. SMEs have a workforce of under 250 people and have either an annual turnover lower than €50 million or a balance sheet total lower than €43 million.

Structural reforms generally refer to liberalizing economic structures in the national context, including making labour markets more adaptable, liberalizing services, altering taxation systems and restructuring the welfare state.

EU Taxonomy for sustainable activities

The EU Taxomony regulates a sustainability-related classification system of financial products. Providers of financial products and services need to use the taxonomy to report the sustainability of their portfolios. To comply with the EU Taxonomy, companies need to prove that their activities make or enable a “substantial contribution” to climate mitigation or adaptation and fulfil the do-nosignificant-harm principle for biodiversity, water, the circular economy and pollution targets.

Territorial Just Transition Plans

TJTP

Central element of the EU Just Transition Mechanism, which defines territories in which the Just Transition Fund will be used and outlines challenges in each territory, development needs and 2030 targets.

Total cost of ownership

TCO

The total cost of ownership of a vehicle is typically calculated for financial purposes by companies to determine the direct and indirect costs of owning the vehicle. In this case, it includes the purchase price of the vehicle plus the costs of operating it over an expected period of time.

Twin transition

The green transition and digital transformation

Trigger points (for renovation)

Key moments in the life of a building (I.e. rental, sale, change of use, extension, repair or maintenance work) when carrying out energy renovations would be less disruptive and more economically advantageous than in other moments. Taking advantage of these moments would facilitate investment decisions to undertake energy renovation works.

Trans-European Transport Network

TEN-T

A planned network of roads, railways water infrastructure and airports across Europe, with ten core networks to be completed in 2030 and a larger comprehensive network to be completed in 2050.

The ultimate purpose of the network is to ensure the cohesion, interconnection and interoperability of the trans-European transport network, as well as access to it.