D.3.1.c Business Plan of Energy Performance Contracting Trajectory for municipalities of the Province of Flemish Brabant

Transcription

1 D.3.1.c Business Plan of Energy Performance Contracting Trajectory for Title of the project: EPC coaching for municipalities Location: Province of Flemish Brabant Submission date: July 17 th

2 Contents 1 Summary of the Project/Project at a Glance Details of the Proposed Project Helpdesk Energy Management Energy Performance Contract on Building Heritage on Municipal level Internal aspects Strengths Weaknesses External environment Threats Opportunities Market Potential Risk analysis Financial Analysis Cost Preliminary cost Implementation cost Income Feasibility assessment Sensitivity analysis Social benefits and Public support Implementation roadmap Conclusion

3 1 Summary of the Project/Project at a Glance (Nature of the business, the location, resource requirements, volume of business, a brief on market justifying the project, financial highlights) In the Province of Flemish Brabant (PFB) 58 municipalities signed the Covenant of Mayors. The municipalities have already knowledge of the energy efficiency measures they can take in their own building property due to energy audits that are performed in the past. Unfortunately they do not have a long term action plan and the required financial resources to implement these measures. In order to reach their target, the Province of Flemish Brabant supports the local authorities to have a better understanding of how cooperation with ESCOs and Energy Performance Contracting can help them to finance and realize the investments that are needed to upgrade their municipal building infrastructure. Municipalities need support during the process to understand this fairly new cooperation model. Contacts between ESCOs and municipalities are scarce in Flanders and local examples of contracts between ESCOs and municipalities are not available yet. The expected result is that 15 municipalities participate in the project. The project support will lead to at least 10 municipalities that will implement an Energy Management Strategy and related action plan. The objective is that 5 municipalities will start up Energy Performance Contracting with an ESCO. Energy Management and action plan results in 5 % energy reduction (from the start of the implementation every year, not cumulative) Energy Performance Contracting results in 25 % energy reduction (reached two years after the start-up of the project period, contract period: 12 years, 10 year energy savings of 25%). In order to reach these goals, the following method/actions will be used: Step 1: provide general and apprehensible information and training on EPC (in group and individually) Step 2: EPC diagnosis pre-feasibility study: EPC diagnosis to check the feasibility of EPC for the building stock of a specific municipality. Prior data analysis by the advisor(s) of the helpdesk (energy use baseline, benchmarking, evolution energy use, results of existing energy audits, ), followed by a local workshop EPC feasibility and a report. Step 3: Analysis of technical, operational, financial and legal implications: Joint analysis with municipal specialists to answer questions and concerns of the local stakeholders (mayors, deputy mayors, technical team, ). Important phase to remove local barriers. F.i. financial: on/off balance; legal: ownership of technical installations, ; operational: outsourcing, loose of control over technical installations, ; technical: maintenance, technical specifications for public tender, Step 4: kick-off EPC project facilitation: Start-up of EPC trajectory: support with public tender and technical specifications for EPC project facilitator who will guide the EPC tendering and EPC project. Follow-up of the implementation of EPC projects. 3

4 2 Details of the Proposed Project (Requirement of fixed capital and working capital, the cost of project and means of finance. Step-bystep description of the process, plant capacity, expansion plans and quality control procedures etc) The proposed project consist of two components: the Helpdesk Energy Management the evaluation of the cooperation of the municipality with ESCOs and Energy Performance Contracting to finance and realize the investments that are needed to upgrade their building infrastructure. The scope of this Business plan will focus on the evaluation of Energy Performance Contracting as a business concept for financing the local authorities (Municipal level) Building Masterplan and long term maintenance roadmap (cf. 2.2.). 2.1 Helpdesk Energy Management The Helpdesk Energy Management supports the local municipalities by offering this EPC prefeasibility study free of charge. Nevertheless every municipality who is making use of these services, has to sign an engagement letter. They do take an engagement to implement an Energy Management Strategy and related action plan, which will result in: at least in 5% of energy reduction on average of the total building heritage by implementing the energy actions themselves. 4

5 Start-up Energy Performance Contracting for (a pool of ) buildings which will result in an average of 25% reduction. This business model is value driven for the municipalities (environmental impact of the actions to become climate neutral). This is possible at this moment as the Helpdesk Energy Management is subsidized by IEE and the Regional / Provincial authority. The cost to facilitate this coaching project is estimated at euro / year, for 3 years ( in total), starting from 16/09/2014 till September This is the budget allocated to the Provincial Helpdesk Energy Management. The budget will be allocated as defined underneath (estimation) EPC coaching: /Year Implementation of standard EPC contract: /Year Awareness activities: /Year ESA95 follow-up: /Year (desk research and legal experts) Training of technical teams in EPC expertise: /Year 2.2 Energy Performance Contracting on Building Heritage on Municipal level The scope of this business plan focuses on the local authorities (municipal level) and the evaluation of a budget plan for the long term maintenance roadmap. The project evaluates the opportunities of the cooperation with ESCOs and Energy Performance Contracting to finance and realize the investments that are needed to upgrade their building infrastructure. Using Energy Performance Contracting improves and speeds up SEAP implementation for their own building heritage. In order to determine the scope of the EPC-project for the building pool of the municipality, the analysis starts with an evaluation of the present building maintenance strategy of the municipality. As the municipal building stock is mainly maintained rather in an ad-hoc way than in a systematic way with a long term view, a new structure for maintenance activities is proposed to the municipality. Creating an overview of maintenance planning is important as the large building stock of the municipalities needs to be renovated. Without basic information, the municipality cannot decide on a maintenance policy or estimate the required budget for renovation and a long term maintenance roadmap. Gathering a wide range of information will be necessary to develop a tailor made Building Masterplan in line with the future needs of the municipality. An assessment of building needs in the future (demographic trend and needs in the region) o Is a new building necessary in order to meet the space requirements or can the municipality make use of other existing assets? Evaluate the long term use of the existing buildings o Evaluate the durability and life cycle of the buildings o Evaluate the possibility of multiple-use/conversion if existing use is no longer needed 5

6 o Evaluate the level of occupation Level of building maintenance during the last decades This analysis aligns the long-term strategy for the patrimony of the municipality and the current state of the buildings and technical installations of the patrimony. By evaluating the possibility to cluster functions in existing buildings, looking at the mobility aspects (public transport and accessibility by bike ) of the public buildings and considering the future needs and tendencies, the analysis gives an extended framework for determining a real estate investment plan. This evaluation might result in selling properties and an investment in some key properties. This business case focuses on the project identification and the financial viability of an EPC-project to reach the ambition level to upgrade the municipal building heritage. Figure 1: EPC Project Identification (SEVEn7, 2013) The turnkey service of an ESCO in a typical EPC project is providing all the services required to design and implement a comprehensive project at the customer facility, from the initial energy audit through long-term Measurement and Verification (M&V) of project savings. 6

7 Figure 2: Cost Savings in EPC (SEVEn7, 2013) Energy Efficiency investments are repaid directly from energy savings and related financial savings, so there is no need for up-front capital on the customer (municipality) side. In the preliminary technical analysis, technical information of the building stock is gathered. During the project identification, based on the present condition of the building envelope and the technical installations, the buildings are assigned to a classification of EPC models: EPC Maintenance: focuses on quick wins and re-commissioning of technical installations. EPC Building Technology: Measures on technical equipment EPC Comprehensive Refurbishment: Measures on the building envelope, deep retrofitting In the preliminary financial analysis, an overview is created of the financial resources of the municipality for the building maintenance. The municipality can choose to create a combined credit with the ESCO for the implementation of EPC Comprehensive Refurbishment. 3 Internal aspects (Describe the strengths and weaknesses) 3.1 Strengths Possibility to implement a long term strategy for a sustainable building heritage: Municipal councils are elected for a 6-year term. By implementing long term Energy Performance Contracts it is possible to implement projects related to a long term strategy for sustainable buildings. Third party financing, no additional budget needed to renovate the buildings: 7

8 Municipalities do not have sufficient own financial means to renovate their building heritage. By using the concept of Energy Performance Contracting, the investment is payed by the savings guaranteed by the ESCO (avoided energy cost through energy savings). Standard Tender Document for EPC project facilitator assignment is available: The Helpdesk Energy Management of PFB supports the municipalities with a standard tender document to assign a EPC Project Facilitator for their building pool and all required tender documentation (technical information of the building frameworks and equipment). 3.2 Weaknesses Loss of control on installations by technical & maintenance teams: Technical teams of the municipalities often feel that they will lose control over "their" technical installations when starting with EPC. ESCOs require control over some technical installations in order to achieve the contractually agreed savings. Lack of long term planning: Most municipalities have a short term vision on building maintenance, due to elections every 6 years. 4 External environment (Describe the threats and opportunities) 4.1 Threats ESR2010 compliance: Under ESR2010 regulation from the EU, it might become impossible to keep Third Party Financing off-balance. This would imply that energy efficiency investments would always increase debt for the municipality. Distrust with the potential customers for Energy Performance Contracting (EPC): EPC is a new business concept for the (local) market: EPC is a new concept in Belgium, and the market still needs to emerge. This creates certain distrust with the potential customers for EPC. Contractual Complexity of EPC contracts: EPC mostly requires complex contractual frameworks. This often scares (especially smaller) municipalities to start EPC projects, because of the lack of inhouse contractual expertise. 4.2 Opportunities The availability of a Belgian Smart EPC standard contract: On demand of Fedesco, a team of experts coordinated by Factor4 developed a brand new and highly innovative Belgian EPC contract that meets all requirements of Fedesco, and in general the Belgian market. The contract branded as 'smart EPC' by Fedesco - combines the best ingredients of existing foreign EPC contracts with some innovative features. For example, the ESCO will not only be remunerated (or fined) based on the energy savings but also based on the comfort and maintenance performance: o The comfort performance will be monitored during the project via an online comfort survey tool that the users in the building will fill out ( o The maintenance performance will be monitored via specialised software based on the Dutch standard NEN

9 In order to enable a large scale implementation of the EPC contract, a user friendly EPC manual was developed that guides client and EPC facilitator through the whole process of the procurement and follow-up of an EPC project. The EPC Market Supply is stable: The actors at the supply side of the EPC market are well informed by the EPC opportunities in the near future. The 'typical' multinational ESCOs and maintenance companies capable of providing EPC projects are present in Belgium. 5 Market Potential (Introducing a new product to the market requires an analysis of the external factors that may affect a successful business case. The business model environment can be described by a number of forces that will influence the competiveness of the business on the short and long haul Key trends, industry forces, macroeconomic forces, and market forces-. Provide a note on marketing strategy, potential customers, competition, market size and future prospects) In Belgium there are enough suppliers to be able to provide an EPC service. But as it is an unproven concept, the market seems not to be ready. A list of ESCOs and related associations can be found on the BELESCO-website (Belgian ESCO Association, ) and the Agoria Greenbuilding Platform association. There is also a high level of EPC-knowledge on the Belgian market and key-players are available (EPCconsultants, ESCOs,...) but still an unproven approach (high knowledge level, young market). An extended report on the market situation in Belgium can be found in following country reports for Belgium: An overview of 'The Energy Service Companies Market in Europe' can be found in a report of the European Commission. ( 0real%20final%20esco%20report% pdf) An overview of the specific situation in Belgium is available in a the EU Transparense website (published in March 2014) ( ) 6 Risk analysis (Emphasis on those elements that are threats to the project with an important impact) The EPC provider bears the risks of technical implementation and operation and guarantees the outcome and all inclusive cost of the services for the duration of the contract. The EPC provider takes over negotiations and business arrangements for the client, thus decreasing the commercial risks on the client side. 9

10 Figure 3: Energy Performance Contracting: A modular package with success guaranties (Bleyl-Androschin, 2010) As for energy services, transfer of technical and economic implementation and operating risk as well as take-over of function, performance and price warranties by the ESCo play a crucial role. These elements create added value compared to in house solutions and are guaranteed in the EPCcontract. In other words: contracting is more than putting together individual components. The contracting concept incorporates incentives and guarantees, that - throughout the contract term the entire system performs according to specifications. In this way, the business service concept has no risks for the municipality. Although the ESR2010 compliance is a major risk for the municipalities to be able to implement EPC as an instrument. Under ESR2010 regulation from the EU, it might become impossible to keep Third Party Financing off-balance. This would imply that energy efficiency investments would always increase debt for the municipality. 7 Financial Analysis (This section should provide a basic financial assessment of the project including the expected IRR and payback period as well as data on expected capital costs, depreciation, operation and maintenance costs and expected revenues. Full financial spread sheets showing IRR calculations and cash flow can be included in the annexes.) In this chapter a financial analysis of a EPC project is considered based on the principles of the EPC business model. For a real case analysis, we refer to an example applied on the EPC building pool of the municipality of Beersel (see annex 1). 7.1 Cost (Capital cost, Cost for studies and other initial promotional costs, Cost of raw materials, utilities, manpower, repairs and maintenance, selling and distribution expenses, administrative expenses, interest on loans availed, depreciation and any other expenses fixed cost and variable cost) To evaluate the cost of an EPC project, a distinction is made between the preliminary cost and the implementation cost of the EPC project. 10

11 7.1.1 Preliminary cost The Helpdesk Energy Management supports the local municipalities by offering this pre-feasibility study free of charge and is not taken into account in the municipality expenditures. Nevertheless after the EPC coaching trajectory of the Helpdesk Energy Management, every municipality needs to assign an EPC facilitator. The facilitator supports the municipality in tendering the ESCO and in Measurement & Verification activities during the EPC contract period. The cost of the EPC facilitator is estimated on a budget of an additional cost of per building in the EPC project. During the EPC contract the maintenance performance will be monitored via the Dutch standard NEN 2767, so a standardized condition monitoring will also be performed before the start of the EPC project. The cost of this process is estimated on an additional per building. These preliminary costs have to be financed or pre-financed by the municipality itself. Although it can be a contract requirement to the assigned ESCO to take the cost of the EPC facilitator into account as an expense during the EPC contract period Implementation cost Considering the implementation cost of an EPC process, the business model of EPC and its key features are explained. Figure 4:Business Model of Energy Performance Contracting (Bleyl-Androschin, 2010) The key features of EPC are: 11

12 An Energy Service Company (ESCo) plans and realizes energy efficiency measures and is responsible for their operation and maintenance throughout the contract term. The ESCo has to guarantee energy cost savings compared to a present state energy cost baseline. The efficiency investments are (partly) paid back out of the future energy cost savings. The client continues to pay the same energy costs as before (sometimes even a smaller amount). After termination of the contract, the entire savings will benefit the client. The ESCo s remuneration is the contracting rate and depends on the savings achieved. In case of underperformance the ESCo has to cover the short fall. Additional savings are shared between building owner and ESCo. Based on the previous remarks, we define Energy Performance Contracting as: A comprehensive energy service package aiming at the guaranteed improvement of energy and cost efficiency of buildings or production processes. An external Energy Service Company (ESCo) carries out an individually selectable cluster of services (planning, building, operation & maintenance, (pre-) financing, user motivation ) and takes over technical and economic performance risks and guarantees. Depending on the kind of efficiency measures and the EPC contract period, the investments are entirely or partly paid back out of the future energy cost savings. By implementing an EPC Comprehensive Refurbishment with deep retrofitting measures on the building envelope, additional financial means are needed to finance the EPC project. The municipality can choose to create a combined credit with the ESCO for the implementation of EPC Comprehensive Refurbishment. 7.2 Income (Sales, cost of manufacturing, contribution, tax liabilities, repayments, retained profit/loss) In the evaluation of the income of an EPC project, it is important to consider the avoided cost through the implementation of the EPC contract. These avoided annual costs are the investment budget for the EPC project. Lower new overall energy costs (fuel, electricity) Operational costs Maintenance and repair cost(substitute investment) An important income is the extension of the building life cycle and so the increased market value of the building at the end of the EPC contract. Another important income can be subsidies which are usually compatible with credits: A subsidy will reduce the needed credit volume and can be seen as risk sharing instrument, which could reduce the interest rates. Some government owned banks offer so called soft loan programs (subsidized interest rates) for environmental investments with a Financial Institute as implementation partner. Usually, banks are not willing to take care of the subsidy acquisition, leaving this task with the borrower (the municipality). Also the EPC facilitator can assist to acquire the subsidy. 7.3 Feasibility assessment (IRR, NPV, payback period, benefits of the project) 12

13 The feasibility assessment of an EPC project will depend on the type of efficiency measures that are implemented in the buildings. The benefits of the project are the achieved energy savings and the extension of the building life cycle. In this assessment, the evaluation is considered theoretically based on rule of thumbs for the different EPC models, namely: EPC Maintenance: focuses on quick wins and re-commissioning of technical installations. EPC Building Technology: Measures on technical equipment EPC Comprehensive Refurbishment: Measures on the building envelope, deep retrofitting An EPC project of a municipality will consist of different types of EPC models in the selected building pool. Depending on the mix of efficiency measures implemented in the building pool within the EPC project, an average value of the above mentioned investments, savings and payback period will be applicable to the project. In the feasibility assessment, the extension of the building life cycle and so the increased market value of the building at the end of the EPC contract should also be taken into account. 7.4 Sensitivity analysis (Sensitivity analysis on important parameters with a great impact to the project financial feasibility) In order to structure financial implications of an EPC contract, relevant categories to consider are (Bleyl-Androschin, 2010): 1. Direct financing cost (financing conditions, interest rates, ) 2. Legal aspects (Right and duties, ownership, contract cancellation, end of term of regulations) 3. Required collateral (securities) by financing institution 4. Taxations implications (VAT and purchase tax, corporate income tax, acquisition of land tax, ) 13

14 5. Balance sheet & accounting implications (who activates the investment and balance sheets effects (-> on or off balance)) 6. Management expenditure (transaction cost, comprehensive indicators Maastricht criteria) These six categories will have different implications which has to be considered for each municipality individually. These criteria will have an impact on the project financial feasibility. 7.5 Social benefits and Public support (Please identify and rate the positive impacts of the project and provide an alternative scenario of feasibility analysis including public support if needed to achieve a reasonable Return on investment) The municipalities signed the Covenant of Mayors and committed to increase energy efficiency on their territories. By their commitment, Covenant Signatories aim to meet and exceed the European Union 20% CO 2 reduction objective by To achieve this aim, the implementation of a sustainable energy action plan (SEAP) is necessary. By implementing EPC and renovating the building heritage of the municipality, the local authority can achieve 20% CO 2-reduction for her own building property, which serves as a good example. During the implementation phase, it will be necessary to ensure good communication. This can be a good opportunity to inform and involve citizens and other local sector organisations and stakeholders It 14

15 might ensure more support for the whole process of SEAP implementation and contribute to awareness raising and behavior changes of citizens and other stakeholders to reach the 20% reduction objective for the whole territory of the municipality. 8 Implementation roadmap (Use a Gantt chart to show the timeline for key activities and milestones throughout the project implementation phase.) The timeline of the implementation roadmap will depend on many local factors and stakeholders and will be different for each municipality. An example of an average project timeline of an EPC project is presented underneath. Figure 5: EPC Project Identification and timing (SEVEn7, 2013) 9 Conclusion (Is it a good or bad idea? Why should investors put their money in this project?) The EPC mechanism can be considered as a win-win mechanism and a valuable tool towards achieving higher energy performance. 15

16 Annex 1: Financial Analysis of the case of EPC scope of the Municipality of Beersel The goal of the Helpdesk supports the local municipalities in an EPC-coaching project. This prefeasibility study is free of charge for the municipality and is not taken into account in the municipality expenditures. The operating cost of the Helpdesk Energy Management financed by the Province of Flemish Brabant is not taken in consideration neither. In this annex, the financial analysis of an EPC-project for one municipality, namely the municipality of Beersel, to give a better insight into the theoretical approach of the Financial analysis in chapter 7. Cost To evaluate the cost of an EPC project, a distinction is made between the preliminary cost and the implementation cost of the EPC project. PRELIMINARY COST The Helpdesk Energy Management supports the local municipalities by offering this pre-feasibility study free of charge and is not taken into account in the municipality expenditures. Nevertheless after the EPC coaching trajectory of the Helpdesk Energy Management, every municipality needs to assign an EPC facilitator. The facilitator supports the municipality in tendering the ESCO and in Measurement & Verification activities during the EPC contract period. The cost of the EPC facilitator is estimated on a budget of an additional cost of per building in the EPC project. During the EPC contract the maintenance performance will be monitored via the Dutch standard NEN 2767, so a standardized condition monitoring will also be performed before the start of the EPC project. The cost of this process is estimated on an additional per building. These preliminary costs have to be financed or pre-financed by the municipality itself. Although it can be a contract requirement to the assigned ESCO to take the cost of the EPC facilitator into account as an expense during the EPC contract period. IMPLEMENTATION COST Considering the implementation cost of an EPC process, the business model of EPC and its key features are explained in Implementation cost and Figure 4:Business Model of Energy Performance Contracting. We may conclude that the implementation cost include as key elements the pre-financing of the energy efficiency measures and refurbishment investments Operation and maintenance cost (of the technical installations) The investments of the project are based on rules of thumbs for different EPC models, namely: EPC Maintenance focuses on quick wins and re-commissioning of technical installations: the investment in % versus the yearly baseline cost is estimated between 10-30%. EPC Building Technology Measures on technical equipment : the investment in % versus the yearly baseline cost is estimated as 150%. 16

17 EPC Comprehensive Refurbishment Measures on the building envelope, deep retrofitting: : the investment in % versus the yearly baseline cost is estimated between %. EPC Maintenance Buildings Electricity 2014 (usage, KWh) 1. EPC Maintenance Heating 2014 (kwh) Distribution net Solar Panels Natural Gas Fuel Cost/yearly ( ) savings by solar panels ( ) cumulative cost ( ) (inc. Solar panels) Lambiekcentrum en DOC OCMW Huizingen Sportcentrum LOT Totaal: Measure Investment Yearly savings Investment ( ) Re-Co en Quick Wins (% t.o.v. baseline) (% t.o.v. baseline) 10% - 30% (average 20%) 15% EPC Building Technology Buildings Elektricity 2014 (usage, KWh) 2. EPC Building technology Heating 2014 (kwh) Distribution net Salar Panels Natural Gas Fuel Cost/yearly ( ) savings by solar panels ( ) cumulative cost ( ) (inc. Solar Panels) CC De Meent WZC De Ceder Sporthal Beersel Total: Measure Investement Yearly savings Investment ( ) (% of baseline) (% of. baseline) HVAC, relighting + EPC Maintenance 150% 25% EPC Comprehensive Refurbishment Buildings Elektricity 2014 (usage, KWh) 3. EPC CR Heating 2014 (kwh) Distribution net Salar Panels Natural Gas Fuel Cost/yearly ( ) savings by solar panels ( ) cumulative cost ( ) (inc. Solar panels) Lagere school Huizingen Sportcentrum LOT Total: Measure Investement Yearly savings Investment ( ) (% of baseline) (% of. baseline) Isolation,windows + EPC tbuilding technology 450% - 600% 30% Income In the evaluation of the income of an EPC project, it is important to consider the avoided cost through the implementation of the EPC contract. These avoided annual costs are the investment budget for the EPC project. Lower new overall energy costs (fuel, electricity) Operational costs Maintenance and repair cost(substitute investment) An important income is the extension of the building life cycle and so the increased market value of the building at the end of the EPC contract. 17

18 The benefits of the project are the achieved energy savings and the extension of the building life cycle. In this assessment, the evaluation is considered theoretically based on rule of thumbs for the achieved energy savings of different EPC models, namely: EPC Maintenance focuses on quick wins and re-commissioning of technical installations: the savings in % versus the yearly baseline cost is estimated on 15%. EPC Building Technology focusses on measures on technical equipment : the savings in % versus of the yearly baseline cost is estimated on 25%. EPC Comprehensive Refurbishment Measures on the building envelope, deep retrofitting: : the savings in % versus the yearly baseline cost is estimated on 30%. Measure Investment Yearly savings Investment ( ) Yearly savings ( ) Payback period( years) Re-Co en Quick Wins Estimation of savings EPC Maintenance (rule of thumb) (% t.o.v. baseline) (% t.o.v. baseline) 10% - 30% (average 20%) 15% ,67-2 Estimation of savings EPC Building technology (rule of thumb) Measure Investement Yearly savings Investment ( ) Yearly savings( ) Payback period years) (% of baseline) (% of. baseline) HVAC, relighting + EPC Maintenance 150% 25% Estimation of savings CR (rule of thumb) Measure Investement Yearly savings Investment ( ) Yearly savings( ) Payback period years) (% of baseline) (% of. baseline) Isolation,windows + EPC tbuilding technology 450% - 600% 30% (PRE)FEASIBILITY ASSESSMENT (IRR, NPV, payback period, benefits of the project) The feasibility assessment of this EPC project is depending on the mix of efficiency measures implemented in the building pool within the EPC project, an average value of the above mentioned investments, savings and payback period will be applicable to the project. In the real feasibility assessment considered after the ESCO final proposal of energy efficiency measures, the extension of the building life cycle and so the increased market value of the building at the end of the EPC contract should also be taken into account. 18