Annual EUKN Conference Municipal Action for Energy Efficiency Dr. Daniel Hesse Berliner Energieagentur GmbH Oradea, 6 November 2013
Contents BEA Facts and Figures The Case for Energy Services Energy Performance Contracting (EPC) Energy Saving in Berlin Conclusions
Contents BEA Facts and Figures The Case for Energy Services Energy Performance Contracting (EPC) Energy Saving in Berlin Conclusions
BEA Facts and Figures Established in 1992 as Public Private Partnership Shareholders Federal State of Berlin Vattenfall Europe GASAG KfW Banking Group Capital Stock 2.5 m Annual Turnover 12.9 m 905 k company earnings (EBIT) Know-how 57 members of staff Services Contracting Consulting International Know-How Transfer Based in Französische Straße 23 10117 Berlin Germany Phone: (030) 29 33 30-0 e-mail: office@berliner-e-agentur.de Internet: www.berliner-e-agentur.de
Contents BEA Facts and Figures The Case for Energy Services Energy Performance Contracting (EPC) Energy Saving in Berlin Conclusions
The added value of Energy Saving Challenges in Germany Energy Policy Targets Energy Concept of the Federal Government (September 2010) CO 2 emissions reduction until 2020 by 40%, until 2050 by 80 to 95% (reference year: 1990) Reduction of primary energy consumption until 2020 by 20%, until 2050 by 50 % (reference year: 2008) Nearly carbon-neutral building stock until 2050 Energy Transition Power capacity gap: 8,5 GW of nuclear power capacity retired in 2011, remaining 11,5 GW capacity will be retired by 2022 (original share: more than 20% of generation capacity) Energy Efficiency is essential!
Energy Efficiency Technical Savings Potential in Buildings 10 % to 30 % Lighting Process heat, space heating /warm reduction 20 % water, electric motors, pumps reduction each Up to 18 % reduction Ventilation Cooling Systems Up to 15 % reduction
Energy Efficiency Barriers to Implementation by Energy Consumers Barriers: Lack of capacities Lack of information Lack of motivation (energy not core business) High investment costs Solution: Energy Services
Energy Services A simple definition Energy Services Application of energy efficiency know-how by third party + Performance related remuneration and/or risk transfer Energy Service Company (ESCO) = Provider of Energy Services
Energy Services Customization of ESCO-Models Value chain Target group Technologies Payment for Planning Implementation Operation management Public buildings Building Supplied structure energy + + + = Industrial Guaranteed Heat companies savings Privat buildings Air conditioning EPC for public buildings Maintenance SME Lighting Financing Training Appliances Engines & pumps Co-genearation RE power generation
Energy Services Some typical models Energy Performance Contracting Energy Operation Contracting Energy efficient operation of existing equipment/appliances (no investment) Energy Supply Contracting Planning, financing, implementation Operation (EE optimisation) System analysis, planning, financing, implementation & operation System responsibility for equipment & users behaviour Controlling Invoicing of energy delivered Invoicing of energy delivered Invoicing of reduced energy consumption
Contents BEA Facts and Figures The Case for Energy Services Energy Performance Contracting (EPC) Energy Saving in Berlin Conclusions
EPC General Project Scheme Building owner remuneration saving guarantee ESCO remuneration Facilities /sites natural gas district heat electricity oil Utilities Gas, electricity and/or fuel supply companies Co-ordination Supply Technical issues
Guaranteed savings The added value of Energy Saving Energy Saving Guarantee Contract: Remuneration to the ESCO /year Energy costs before implementation of EE measures Energy costs after implementation of EE measures Performance-based remuneration to the ESCO (share of guaranteed savings) Budget relief to the client (share of guaranteed savings) 1.000.000 750.000 Real reduction in energy costs (to the full benefit of the client after end of contract) 500.000 250.000 Baseline year 2014 2015...... 2023 2024 2025 2026 Implementation of measures End of contract
EPC in Germany Main Clients Cultural centres Schools, Universities Trade and commerce, housing associations 5% Administrative buildings Hospitals 20% Public authorities 75% Sports facilities Prisons Hospitals
EPC ESCOs provide services in the field of Lighting Heating Cooling & air conditioning CHP generation facilities Insulation etc.
EPC Contract Content Key elements: Guaranteed services of the ESCO Energy saving guarantee and share of the client on the savings Hardware investments (amount and structure) Energy controlling system, maintenance Compliance with required comfort levels User motivation concept (e.g. incentive schemes) Verification of energy savings and remuneration Liability / collaterals / crisis management Around 2-4 months Around 6-9 months Invitation to tender and award of contract Project preparation Setting up of project control committee Selection of buildings Evaluation of building data Determination of energy costs baseline Determination of targets (e. g. minimum saving guarantee) Compilation of tender documents Project-specific adjustment of the Energy Saving Guarantee Contract Around 10 bidders Announcement in the EU official gazette Expression of interest Request for tenders Tender preparation Inspection of the buildings Validation of building data Rough analysis with regard to energy Determination of energy and cost saving potentials 4-10 bidder 2-4 bidders Most economic offer Presentation of bids Contract negotiations Energy Saving Guarantee Contract No economic offer Cancellation round 7-12 years Project lemenation Preparatory phase Implementation of energy saving measures Main Berliner phase of obligation Energieagentur to perform GmbH Guaranteed energy cost savings
EPC Financing Options Financing through client Renumeration of services and investment Financing through ESCO (credit) Financing through ESCO (forfaiting) Sale of receivables Cash Advance Renumeration of ESCO investment
EPC Advantages for Potential Customers Guarantees for savings, energy prices and operation Shifting technical and economical risks to the ESCO (Part-) repayment from future energy cost savings Saving investment costs through third-party financing Outsourcing of interface problems, focusing on the own key business Eliminating deficiencies, cash efficiency potentials Long-term increase of comfort level and property value
Contents BEA Facts and Figures The Case for Energy Services Energy Performance Contracting (EPC) Energy Saving in Berlin Conclusions
Energy Saving Partnership Berlin A Model of Success General background Energy Saving Partnership (ESP)= Energy Performance Contracting (EPC) for public buildings in Berlin Since 1995 Coordination by Senate Department for Urban Development and the Environment Project management by Berliner Energieagentur Key figures Number of contracts: 26; about 1,400 buildings Guaranteed Savings (all contracts): about 11.9 m /a Share of Berlin (savings on public budget): about 2.7 m /a CO2 reduction: 70k t /a, about 600,000 t Investments (all contracts) 53 m
Energy Saving Partnership Berlin (ESP) Project management Auftraggeber (Land, Krankenhaus, etc.) Client (State, hospital, etc.) Beratung Consultancy Beauftragung Assignment Berliner Energieagentur Projektmanager Project Manager Technisch-wirtschaftliche Vorgaben, Verhandlungen Technical-economic requirements, Negotiations Energiespar-Garantievertrag/Energy Saving Guarantee Contract Energiesparpartner Contractor Energy Saving Partner Contractor
Best Practice Wenckebach Hospital Berlin Building: public-owned hospital with 438 beds Baseline: 808,359 /a Guaranteed savings: 39.6 % = 320,000 /a Invest: 2.44 m CO 2 reduction : 1,789 t/a Duration of contract: 12 years (start in 2011) Measures: modernisation of heat distribution, cooling and ventilation system, installation of CHP unit, webbased energy management system, user trainings Special feature: insulation of top storey ceilings
Best Practice Deutsche Oper Berlin (German Opera house) Building: Baseline 2005/06: Guaranteed savings: building complex with playhouse, studios, administration etc. (approx. 60,000 sqm GFA) 651 K /a Invest (hardware): 1.48 m CO 2 reduction: Contract duration: 35.8 % = 233,155 /a 1,085 t/a 12 years Obligatory measures: refurbishment of VAC installations, optimization of cooling plant, hot water generation and CBCS Special features: contribution of 1 m to construction costs by DOB, resulting in increase of budget relief from 14,992 /a to 126,021 /a
Best Practice Berliner Bäder-Betriebe Pool: Baseline: Guaranteed savings: Invest: 7.9 m CO 2 reduction : 11 buildings/swimming pools 4.9 m /a (incl. water costs) 33.5 % = 1.6 Mio. /a 4,938 t/a Duration of contract: 10 years (start in 2001) Measures: water saving technology, optimizing filter flushes,separating water circulations, modernisation of hot water generationrenovation of air conditioning and lighting
Best Practice Berliner Immobilienmanagement GmbH Re-tender after expiration of first ESP contracts (Pools 1 + 2) Pool 24: Baseline 2007: Guaranteed savings: 18 office buildings (approx. 300,000 m² GFA) 2.07 million /a 21 % = 433,757 /a Invest: approx. 2.4 million CO 2 -reduction: Duration: Measures (selected): 2,208 t/a 10 years boiler replacement, CHP-unit, optimizing of ventilation systems, renewal of CBCS special feature: obligation of maintenance of all old systems
Best Practice EPC light in Pankow, Berlin Goal: Number of buildings: 15 Baseline: Guaranteed savings: ESCO payment: CO 2 -reduction: Duration of contract: Measures: To reduce energy consumption by mid-2012 in schools and administration buildings through light measures 882.714 /a 10.2 % (90.037 /y) 44.118 /y 3.973 t/a 2 years Elementary School, Kollwitzplatz in Pankow Youth facility in Pankow Energy management, system optimization and continuous monitoring
Contents BEA Facts and Figures The Case for Energy Services Energy Performance Contracting (EPC) Energy Saving in Berlin Conclusions
Conclusions Energy Performance Contracting can decrease consumption and costs by more than 25 % Transparent contractural and procedural standards result in cost efficiency and secure project development / implementation Competition ensures high economic efficiency Solid legal framework required Dedicated institutions acting as facilitators can assist in driving EPC forward Standard EPC needs to be adjusted to local conditions
EBRD Project: Market development of EPC in Romania (1/2) Romania: GEF Opening the Market for Private ESCOs Project Implementation Support Objective: Supporting market development of energy performance contracting (EPC) for public buildings and street lighting in Romania Target groups: Municipalities (as potential EPC clients), energy service companies, political and economic decision-makers Consortium: BEA (Team leader); partners from Romania: Tractebel Engineering (technical expert), TUD consulting (financial expert), Tuca Zbarcea (legal expert) Contents: Implementation of pilot projects, development of model contracts and tender documents, capacity building, adaptation of regulatory framework Period: 5/2013 5/2016
EBRD Project: Market development of EPC in Romania (2/2): Deliverables 4 EnPC pilot programs in 4 municipalities showcases for energy efficiency projects in public buildings and street lighting (several EnPC tenders under each program) Expand the use of EnPC to other municipalities Replication to 5-6 municipalities Improved regulatory framework that enables ESCO/EnPC projects in public sector Capacity building in 20 municipalities EUR 10 million tendered projects and a EUR 5 million project pipeline within 36 months
Thank you for your attention! For more information please visit: www.berliner-e-agentur.de office@berliner-e-agentur.de
BACKUP
EPC in complex stakeholder structure: Public sector example in Berlin City Districts Berlin BEA Facilitator State of Berlin Hand over of buildings and rent back Payment EPC project management BIM Public Facility Management Company Building maintenance Payment Savings guarantee ESCO Stakeholder management is crucial Energy supplier Energy supply Building Pool Energy saving measures, technical maintenance
EPC Risk Allocation Risk of use Energy price risk Technical risk Economic risk by building owner; change of use => modification of guaranteed savings by building owner; rising prices => protection of contractor decreasing prices => benefit for building owner by ESCO; guarantee of performance, technical condition & availability by ESCO; for the total investment into EPC schemes Ownership Equipment transferred into the property of building owner at the moment of installation and/or hand-over