Facilitating the ESCO market

Size: px

Start display at page:

Download "Facilitating the ESCO market"

Ross George
6 years ago
Views:

1 Facilitating the ESCO market Christiane Egger OÖ Energiesparverband 1

and municipalities (energy advice, training, building certification etc, - manages the Ökoenergie-Cluster (170 companies) Sustainable energy in Upper Austria: today: 35

2 The Region of Upper Austria - Oberösterreich Regional energy agency - OÖ Energiesparverband 1.4 million inhabitants, capital Linz, industrial region the OÖ Energiesparverband - funded by the regional government - provides services to private households, business and municipalities (energy advice, training, building certification etc, - manages the Ökoenergie-Cluster (170 companies) Sustainable energy in Upper Austria: today: 35 % renewable energy (16 % biomass, 14 % hydro, 5 % other) 57 % renewable heating avoided imports of fossil fuels: > 1 billion Euro/a by 2030, 100 % electricity and space heating from renewables (requiring e.g. a reduction of heat demand by 39 %)

3 A challenge for municipalities! 56 million street light luminaires (62 million street lamps) in operation in Europe, estimated electricity consumption of 35 TWh For municipalities with older, inefficient systems, street lighting accounts for 30-50% of their total electricity consumption, with enormous savings potentials: often % Savings potential recognised by EU policies: phasing out of nearly 80 % of all lamps currently in operation until 2017 (meaning: they can not be purchased any longer)

4 LED streetlighting - life cycle costs Example Costs in 5 years (Euro/lamp) Costs in 15 years (Euro/lamp) Lamp type Total costs Investment Electricity Maintenance Investment Electricity Maintenance Total costs High Pressure Mercury Lamp LED

5 A challenge for municipalites - an opportunity for EPC! So far, in many European regions, EPC markets are not well developed. Street lighting is a good "learning and testing ground" for EPC (lower technical and economic complexity) new LED technologies offers high savings with comparatively short pay-back times due phasing out, municpialities are under pressure to act This creates an opportunity: to establish EPC markets to support the market introduction of efficient lighting technologies

6 IEE project Triggering the market uptake of energy performance contracting through street lighting refurbishment projects in 9 regions Streetlight-EPC Project duration: 1 April March

Streetlight-EPC creates demand and supply for EPC projects in 9 regions by setting up regional EPC facilitation services (providing comprehensive support both to municipalities and to SMEs as

7 Streetlight-EPC creates demand and supply for EPC projects in 9 regions by setting up regional EPC facilitation services (providing comprehensive support both to municipalities and to SMEs as potential ESCOs). performs real-life procurement of 36 EPC street lighting projects during the project life, creating knowledge and trust in both LED and other street lighting technologies and the EPC model. The project team: 9 regional agencies/organisations (providing the EPC facilitation services) and 9 municipalities (committed to implement EPC projects)

8 Partners 19 partners in 9 countries 9 regional partners, 9 city partners, 1 European network (FEDARENE) co-ordinator: OÖ Energiesparverband Region Regional partner City/county partner Upper Austria OÖ Energiesparverband Wels North-West Croatia REGEA Zagreb Coun. South Bohemia/Czech Republic ECCB T. Sviny Pomerania/Poland BAPE Gdansk Carlow & Kilkenny County/Ireland CKEA Kilkenny Coun. South East Sweden ESS Kalmar Podravje/Slovenia ENERGAP Maribor Macedonia MACEF Skopje North/Central Spain (regions of Madrid, Castilla y Léon, Cantabria) ESCAN Santander

The facilitation service Offering tools: Quick-checks, guides and FAQs (for the 9 project regions) Connecting municipalities, (potential) ESCOs, banks, lighting companies and other stakeholders -

9 The facilitation service Offering tools: Quick-checks, guides and FAQs (for the 9 project regions) Connecting municipalities, (potential) ESCOs, banks, lighting companies and other stakeholders - events (conferences, trainings, meetings etc.) - targeted meetings Identify promising "candidate projects" Support municipalties and ESCOs in project development and implementation - initial assessment of technical and economic viability - support in project audits - guidance on procurement rules, contractual and technical issues

by municipalities the ESCO will make too much money I have to fire the maintenance staff (municipal

10 The challenges differ... Banks that do not understand the business model Ownership issues No/few (good) ESCOs Lack of information by municipalities the ESCO will make too much money I have to fire the maintenance staff (municipal staff/local electrician) the ESCO will go bankrupt I can build new streetlighting with an EPC project Who pays what to whom and when Low electricity prices Public procurement rules (perceived or real barriers)

becoming ESCOs explaining, explaining, explaining Case studies of realised EPC project Midterm

11 Our solutions Cities committed to realising Streetlight-EPC projects Regional energy agencies as market facilitators Support with getting regional, national and EU funds Supporting SMEs in becoming ESCOs explaining, explaining, explaining Case studies of realised EPC project Midterm approach Internal helpdesk on procurement, technical, contractual and (4 experienced partners)

12 Quick checks, guides and FAQs Available at in 10 languages: Quick checks for a first initial assessment of the suitability of EPC street lighting refurbishment Guide on implementing streetlight-epc projects FAQs on streetlight-epc

Quick-Check "Favourable" factors for economic viability

than 10 years lighted street to be renovated more than

average electricity price above 10 cents/kwh

13 Quick-Check "Favourable" factors for economic viability of EPC streetlight refurbishment: installation older than 10 years lighted street to be renovated more than 1 km operational hours above 3,600 hrs. average electricity price above 10 cents/kwh maintenance costs above 15 Euro/lamp,a no dimming and/or switch off during the night

Progress so far Facilitation services in 9 regions in 9 months: - 31 events with over 1,070 participants were held - 103 quick-checks completed - more than 210 enquiries (advices) answered - more

14 Progress so far Facilitation services in 9 regions in 9 months: - 31 events with over 1,070 participants were held quick-checks completed - more than 210 enquiries (advices) answered - more than 240 "FAQs" (with answers) on the websites - 51 bi-lateral meetings with banks/funding bodies 37 candidate projects - 27 in street lighting, 10 indoor lighting 7 implemented projects Key findings Good technical project preparation is key EPC: High interest, low knowledge LED: offers choice, requires knowing your needs

replaced by LEDs improved control systems (e.g.

15 Example: City of Wels (Upper Austria) A Comprehensive LED project streetlighting renovation project in the city of Wels (population: 61,000) 4,500 luminaires (50 % of all luminaires), including all lamps older than 15 years, replaced by LEDs improved control systems (e.g. 1/3 of the lamps are now dimmed between 21:30-05:00) Investment: 1,656,000 Savings: - 36% guaranteed by the ESCO - 1,300,000 kwh/a - 240,000 /a, 60,000 /a maintenance costs Contract duration: 7 years

and the programme started very slowly ("Nigerian email phenomenon") 15 ESCOs are listed on ESV website and in total more than 30 ESCOs are

16 The EPC facilitation services Upper Austria Results more than 200 EPC projects realised (more than half in municipalites, about half (also) include streetlighting, others are building-related EPC and renewable heat contracting projects) the first years were challenging and the programme started very slowly ("Nigerian phenomenon") 15 ESCOs are listed on ESV website and in total more than 30 ESCOs are established which offer ESCO services in Upper Austria EPC has found its place in the portfolio of sustainable energy solutions in Upper Austria

calculate (user behaviour) a wider range of energy efficiency measures to choose from, more challenging to standardise

17 The EPC facilitation services Upper Austria Building-related EPC much larger number of application possibilities and potentials interesting examples from municipalities, institutions and businesses real savings are more challenging to calculate (user behaviour) a wider range of energy efficiency measures to choose from, more challenging to standardise frequent measures include optimisation of energy systems (heating/ventilation), deep renovation through EPC only possible in exemplary cases

Savings: 50%, 14,700 /a Contract duration: 10 years Municipality of Enns: Thermal and technical retrofitting of 9 buildings Replacement

18 Examples from Upper Austria: EPC in public and institutional buildings Red Cross Building Wels: Retrofitting of Red Cross building in Wels to NZEB standard Thermal refurbishment, replacement of heating system, modernisation of control system Investment: 517,900 Savings: 50%, 14,700 /a Contract duration: 10 years Municipality of Enns: Thermal and technical retrofitting of 9 buildings Replacement of heating systems Refurbishment of the street lighting Investment: Savings: 73%, 520,000 kwh/a, 105,000 /a Contract duration: 10 years

Examples from Upper Austria: EPC/Heat contracting in industry

management, retrofitting of heating system, energy recovery system,

19 Examples from Upper Austria: EPC/Heat contracting in industry Rosenbauer International Comprehensive retrofitting project Energy management, retrofitting of heating system, energy recovery system, etc. Investment: 365,000 Savings: 53,500 /a, 309 t CO 2 /a Contract duration: 6.5 years Fronius Biomass heating plant for a new company building 1, kw biomass boiler Investment: 556,088 Contract duration: 15 years

20 The EPC facilitation services Upper Austria Main lessons... "in-house know-how": building up very deep technical, financial and contractual know-how within the organisation at a first step "explain, explain, explain": the EPC concept and its implementation need significant and continuous efforts in explanation providing targeted advice at all project stages clear up unrealistic expectations at the beginning taking a "quality approach" (better fewer projects, but these are very convincing) it is not only about financing!

21 EPC in Upper Austria Main lessons... good preparation is key (technical and contractual) key elements of the EPC contract include: savings, calculation of EPC fee, duration, assigment of tasks, ownership issues, access to building, risk assigment, provisions for bankruptcy & for fluctuations of energy prices a "good" ESCO has EPC reference projects, involves existing staff (if wished) and presents a clearly structured contract minimum investment necessary ( ) EPC is a long-time partnership

22 World Sustainable Energy Days 2016: February Energy Efficiency Services Conference European Nearly Zero Energy Buildings Conference Energy Efficiency Watch Conference Young Researchers Conference European Pellet Conference Trade Show - Energiesparmesse: +1,600 exhibitors 22

23 Streetlighting & EPC - now is the time to get active! Christiane Egger OÖ Energiesparverband christiane.egger@esv.or.at

24 What can municipalities do? Lamps only replacement - "plug-in" ("re-lamping") often technically not possible (no lamps available) and even if, technical problems likely low savings Replacing both lamps and ballasts lamps and luminaires then often do not fit well likely to result in a loss of warranty on the whole system Reduction street lighting services on "an ad-hoc basis" (broken lamps are no longer replaced) negative impacts on safety and public perception risk of liability for accidents (in cases of a legal obligation) Replacing luminaires (including lamps and ballasts) by efficient and long-lasting systems (usually LEDs) high upfront investment costs

Overcoming "the chicken or the egg" problem The "no demand, no supply" challenge ESCOs specialists in energy efficiency qualified in technical operation of plants/buildings good understanding of

25 Overcoming "the chicken or the egg" problem The "no demand, no supply" challenge ESCOs specialists in energy efficiency qualified in technical operation of plants/buildings good understanding of contractual & financial issues able to finance the investments The clients (= municipalities) understand the business model develop trust overcome legal constraints Pressure created by phasing out of streetlamps is a real opportunity for starting EPC markets!

Streetlight-EPC. Project approach, key results and lessons learnt. Christiane Egger. OÖ Energiesparverband

Streetlight-EPC. Project approach, key results and lessons learnt. Christiane Egger. OÖ Energiesparverband Streetlight-EPC Project approach, key results and lessons learnt Christiane Egger OÖ Energiesparverband christiane.egger@esv.or.at www.esv-en.at 1 The Region of Upper Austria - Oberösterreich Regional