TIPS financing opens opportunities for companies and organisations to increase energy efficiency
As the prices of energy sources increase and the risks have significantly increased due to stable supply of energy sources, more and more companies revise their energy consumption habits and seek for more beneficial alternatives. Increasing energy efficiency has become one of the solutions for companies which consume a significant amount of energy. Targeted financing provided by the platform TIPS (Tvariųjų išteklių plėtros skatinimas) (Promoting Sustainable Resource Development) established by the Public Investment Development Agency (VIPA) in cooperation with the European Energy Efficiency Fund can be useful for this.
Saving of energy as a contribution to increasing energy independence
According to the European Commissioner Virginijus Sinkevičius, today more than 40 per cent of all energy consumed in the European Union is consumed for heating and cooling of buildings. Reducing dependency on the Russian gas, ensuring affordable energy prices to private customers and business entities can be done not only by searching for alternative gas suppliers or developing energy from renewable sources but also by increasing energy efficiency.
‘The cheapest energy is energy which is not used; thus, energy saving is the quickest and cheapest way to reduce the current energy dependency at the same time helping residents and business to reduce their energy bills. Precisely for this reason, the solutions increasing energy efficiency which are foreseen in implementation of the European Green Deal is the backbone of the real energy independence and stability of prices in the long term’, says the Member of the European Commission responsible for environment.
According to Virginijus Sinkevičius, the business community will have to make a considerable contribution to implementation of the Green Deal and increasing energy independence. ‘Its resolution to increase energy efficiency, willingness to use the European Union investments and private investments helping to save energy are necessary for implementation of the Green Deal and the most recent plans of the European Union to waive the Russian energy sources’, emphasises the European Commissioner.
Benefits of an energy efficiency audit
Enterprises can assess their energy performance by themselves by carrying out an energy audit. Major enterprises of Lithuania which have property (buildings, technological equipment or vehicles) are obliged to do this. Nevertheless, recently the need for an energy audit has increased among small and medium-sized enterprises; this is due to economic and geopolitical situation.
‘Energy audits are ordered by customers of three types: large enterprises for which such audits are mandatory, enterprises which seek for support under one of energy efficiency measures for which such audit is mandatory when submitting an application for funding and other enterprises for which energy costs has become a burden and which are not capable of finding ways to save only within their competences; it is especially felt today when the energy prices significantly increased’, says Gediminas Šilanskas, a representative of the independent engineering system design and energy efficiency consultancy company MEPCO.

Three types of energy audits are possible: audits of buildings, technological processes and equipment and vehicles. During the audits, information on the company’s activities, used types of energy/quantities of energy and costs is collected and analysed, technical and energy characteristics of equipment are established, CO2 emissions of the enterprise are calculated, finally, possibilities for reducing energy costs and energy ad emission reduction expenses are assessed, the recommendations for saving measures are put forward, an audit report is drawn up. The price of the audit depends on the type and scope of the audit and can amount from several thousand Euro to tens of thousands Euro.
‘An energy audit shows distribution of energy costs of the enterprise in a detailed and objective manner, allows to easier understand who are the main energy consumers, the things to which attention should be paid in order to optimise energy consumption. During an audit, we find inefficient places upon renovation of which performance and at the same time the profit increase. Besides, we find ways to save even in the enterprises which look orderly and modern at first sight’, Gediminas Šilanskas tells about the value of the audit.
According to him, an energy audit not only helps to reduce energy consumption, expenses of energy sources and its CO2 footprint and helps to obtain financing for implementation of the intended measures irrespective of whether in the form of “green” credits or financing of such platforms as TIPS.
Besides, enterprises with high electricity consumption, i.e. enterprises which consume more than 1 GWh electricity per year and successfully implement the energy efficiency measures provided for in the audit carried out every four years may recover a part of the paid public service price.
The audit allowed to find a way to increase competitiveness
An energy audit of Panevėžio stiklas AB which was carried out in 2017 and costed several thousand Euro allowed the company to assess the means which would allow to save energy and funds. On the basis of the audit, the company prepared a project and in 2018 obtained financing (in the amount of EUR 160,000, i.e. 80% of the total value of the project) from the Public Investment Development Agency (VIPA).
During the implementation of the project, the following energy efficiency measures were introduced: renovated lighting and use of waste heat for heating of the building allowed the company to save 8466 MWh energy per year and decrease costs. It is important to note that the audit and implemented efficiency measures also opened the possibility for the company to receive a part of earlier paid public service funds (around EUR 100,000) from BaltPool. The company used them for early repayment of the loan to the Public Investment Development Agency.
In continuation of the energy efficiency path, the company repeatedly addressed the Public Investment Development Agency (VIPA): recently, TIPS financing for the design of the solar power plant of Panevėžio stiklas AB has been approved. The value of the project is EUR 1.06 million including a TIPS loan in the amount of EUR 847,000 granted for 10 years. Upon implementation of the afore-mentioned project, ~1,5 MW capacity solar power plant will appear on five roofs of the industrial buildings of the plant. It is planned that it will generate about 1500 MWh electricity per year. Taking into account the current electricity prices, it has been estimated that the project will pay off in 3-4 years.
‘Glass industry is particularly energy source intensive; thus, energy performance was, is and will be very important to us and as the prices of energy sources have changed, the efficiency has become an issue of survival. We have set the main objective to replace all currently used energy sources with renewable sources. After construction of a solar power plant in the building, we can satisfy around 10% of the total amount of electricity consumed every year without burdening ESO networks’, says Gintaras Petrauskas, the General Manager of Panevėžio stiklas AB.

The company of the company says that the TIPS loan was relevant in implementation of the solar power plant. The Public Investment Development Agency (VIPA) finances 80% of the total amount of the project; implementation of the project without the afore-mentioned financing would be complicated. As the prices of gas has inadequately increased since Q3 of the previous year, we finished the year 2021 at a loss. The banks operating in Lithuania provide financing in a particularly conservative manner where your profit (loss) account is negative at least for one year. Thus, the TIPS support is particularly important to us,’ discloses Gintaras Petrauskas.
The head of the Customer Support Department of the Public Investment Development Agency (VIPA) Asta Gladkauskienė is glad with continuous cooperation with Panevėžio stiklas AB. ‘We already have experience in financing their earlier energy efficiency project; thus, we are glad that the customer has returned to us. The company’s activities are close to the strategy and financing objectives of the Public Investment Development Agency (VIPA) because it is the largest glass processer in the region which receives even 50% of glass raw materials from crushed glass,’ says a representative of the Public Investment Development Agency (VIPA) operating the TIPS platform.

TIPS financing for energy efficiency and development of green energy
Please note that enterprises of the public and private sector which are planning to implement projects in the field of energy efficiency and renewable energy sources may be eligible for financing in the amount of EUR 25 million. Financing is granted for solutions which increase energy efficiency and are intended for development of renewable energy sources.
TIPS platform may offer financing for the projects which are likely not to receive financing from the banking sector due to a high risk or unacceptable financing conditions. This may be renovation of technological processes and equipment with a view to saving energy and investment in modernisation of buildings, renovation of lighting, advanced heating, exposure, cooling, ventilation systems, solar power plants, solar parks etc.
As a rule, up to 80 per cent of the value of the investments of the project are financed under all three measures for the period of up to 10 years and the contribution of the borrower should be not lower than 20 per cent. For more information, please visit the TIPS page.
The investment platform “Tvarių išteklių plėtros skatinimas” (Promoting Sustainable Resource Development) (TIPS) started its activities at the beginning of 2022. The platform was established by the Public Investment Development Agency (VIPA) in cooperation with the investment company European Energy Efficiency Fund (EEEE). The main objective of the TIPS platform is promoting investments which may help to reduce the need for energy sources and grow its consumption efficiency and increase the supply of green energy.