Market opportunities emerge as Central and Eastern Europe race to catch up with EU energy transition, finds new report

Regional energy context offers opportunities for companies and policymakers that are distinct from Western Europe, according to the Prince of Wales’s Corporate Leaders Group.
BUCHAREST, March 21 – The necessary transition towards low-carbon energy in Central and Eastern Europe (CEE) opens up new investment opportunities in energy-saving design and technology in the region, a new report has found.

As the European Union develops its long-term strategy for achieving a low-carbon economy, a study by the Prince of Wales’s Corporate Leaders Group (CLG) highlights the business case opportunities and challenges within the CEE region.

The report, The energy transition in Central and Eastern Europe: The business case for higher ambition, identifies factors that have resulted in a slower pace of transition in some areas across the region, while
highlighting the significant untapped potential areas such as clean energy, energy efficiency and sustainable mobility.

“While CEE countries are the newest members of the EU, they can and should still be part of Europe’s climate leadership, because this can mean new jobs and economic opportunities, whilst providing people with the clean air, better energy security and more comfortable homes they deserve,” said Eliot Whittington, director of the Prince of Wales’s Corporate Leaders Group. “Despite vast potential in the region, CEE Member States lag behind their EU neighbours on renewable energy and sustainable transport, and they also have much to gain from improving their housing stock. This represents significant opportunities to catch up by adopting the most recent, innovative and cost-effective technologies. And by seizing these opportunities, CEE countries will be able to deliver better public
health, improved quality of life and economic prosperity.”

The report highlights the opportunity for large-scale energy efficiency improvements in buildings across the CEE region, particularly where Soviet-era multi-unit buildings are prevalent.

In seven out of eleven CEE countries, buildings account for a higher proportion of total energy use than the European average, with the sector using as much as 50 per cent of national energy use in Estonia, Hungary and Latvia.

Energy efficiency improvements in these countries offer proportionately greater benefits than elsewhere in Europe as well as opportunities for investment and innovation, with one in four Hungarian households planning energy efficiency refurbishments worth around €4 billion in the next five years. However, some of the challenges included inconsistent planning regulations and technical standards as well as high levels of private ownership.

“More efficient lighting, including switching to LEDs, can bring huge savings in energy use as well as improving the living and working environment for residents,” said Bogdan Ślęk, Public & Government Affairs Director CEE at Signify (formerly Philips Lighting), which oversaw the installation of a new lighting system in the Spark office complex in Warsaw.

“We see a huge, latent market demand for improvement in lighting services in CEE countries, not only regarding the energy saved but also in terms of creating a better quality working environment.”

The report also cites the high potential for generating renewable energy in CEE to help the region meet the EU’s 2030 energy target of at least a third of energy coming from renewable sources.

In Bulgaria, Hungary and Romania, the potential solar power per unit area is approximately 1.5 times greater than that in Germany or the UK, while Hungary has made moves towards developing its geothermal power and heating resources. This offers the opportunity for investment into CEE’s ageing infrastructure to unlock growth in renewable energy and help overcome public resistance to alternative energy and reliance on fossil fuels.

Finally, the extensive, socialist-era public transport network across many CEE countries also offers the foundation for a yet more efficient service with more investment, better economic growth and phase-out of
high polluting, older vehicles. Recent innovations in this area include electronic ticketing, which was introduced in Tallinn in 2004. Despite limited uptake so far due to economic factors, there is also a strong interest in expanding electric mobility, with emerging e-mobility programmes in Poland and Hungary. “Smart mobility business models and technologies are changing transport – and our lives – across Europe,”
said Bálint Michaletzky, Managing Director, GreenGo Car Europe, Hungary. “We have the opportunity in CEE countries to leapfrog the trend of private car ownership straight to more sustainable ways of travelling around our cities and countries.”

The report sets out recommendations for both businesses and governments, based on research showing opportunities for new financial products and services that reduce the cost barrier for consumers, and new technological solutions tailored to the region. Beyond this, businesses leading by example through decarbonising their own operations in the region can trigger broader deployment of renewables and climate ambition locally.

The report authors call on governments to outline long-term climate plans necessary to provide the stable regulatory environment that can attract commitment from investors and finance infrastructure improvements that can support private sector innovation.

Link to the report: