Looking into different approaches for ESCO development. The example of Germany.

Dr. Daniel Hesse

Berliner Energieagentur GmbH

Bucharest, 8 May 2015

Looking into different approaches for ESCO

development. The example of Germany.

Established

 in 1992 as Public-Private Partnership Shareholders

 Federal State of Berlin

 Vattenfall Europe

 GASAG

 KfW Banking Group Disposes of

 2.5 million € of capital stock Annual Turn-Over

 12.9 million €

 1.0 million € Company earnings (EBIT) Know-how

 58 members of staff

Company divisions

 Contracting

 Consulting

 International Know-how Transfer Based in Französische Straße 23 10117 Berlin Phone: (030) 29 33 30 - 0 E-mail: [email protected] Internet: www.berliner-e-agentur.de

3

Agenda

 Energy Services in general

 Energy Supply Contracting (ESC)

 Energy Performance Contracting (EPC)

Agenda

 Energy Services in general

 Energy Supply Contracting (ESC)

 Energy Performance Contracting (EPC)

5

Benefits of energy efficient technologies or systems (for energy consumers)

 Reduction of operational cost

 Improved profits

 Tap potentials to (co-)finance investments

 Reduced dependency on volatile or rising energy prices

 Improved system performance, e.g.,

 Reduced number of failures/down times

 Reduced exposure to black-outs

 Improved comfort/performance levels

 Increased asset value

 Reduced environmental foot-print

Barriers to implementation of energy efficiency measures:

 Lack of capacities

 Lack of information

 Lack of motivation (energy not core business)

 High upfront investment costs

Solution: Energy Services

7 Performance related remuneration and/or risk transfer Application of energy efficiency know-how by third party

+

Energy Service Company (ESCO) = Provider of Energy Services

Energy Services – A simple definition

Agenda

 Energy Services in general

 Energy Supply Contracting (ESC)

 Main principle  Project examples

 Energy Performance Contracting (EPC)

9

Typical energy supply situation without Energy Services

11

Agenda

 Energy Services in general

 Energy Supply Contracting (ESC)

 Main principles  Project examples

 Energy Performance Contracting (EPC)

ESC Best Practice – Combined Heat and Power

City Carré / Commerzbank, Commercial Complex, Berlin

 Heated floor space approx. 36,000 m²

 Shopping mall, offices and hotel

 CHP unit in existing heating system

 Start of supply: 2006

Technical data:

 CHP unit with 50 kW_el and 97 kW_th

Environmental effects:

 Amount of energy savings 548 MWh/a

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Residential complex “Meller Bogen”

 Largest solar thermal plant in combination with boiler

 Object: multi-family house (563 units)

 Collector surface: 600 m2

 Type of use: room heating and hot water heating

 Solar yield: 205,000 kWh/a

 Energy Services in general

 Energy Supply Contracting (ESC)

 Energy Performance Contacting (EPC)

 Main principles

 Project examples

 Facilitators

15

Typical energy supply situation without Energy Services

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Energy Saving Guarantee Contract: Remuneration to the ESCO

250.000 500.000 750.000 1.000.000 Baseline year 2016 2017 ... ... 2024 2025 2026 2027

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)

Real reduction in energy costs (to the full benefit of the

client after end of contract)

End of contract Implementation of measures €/year G ua ran tee d s av ing s © Berliner Energieagentur GmbH

General financing options for energy services

Financing through client

Financing through ESCO (credit)

Financing through ESCO (forfaiting) Sale of receivables Cash Advance Renumeration of ESCO investment Renumeration of services and investment

Services & Investment Services & Investment Services & Investment

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 Energy Services in general

 Energy Supply Contracting (ESC)

 Energy Performance Contacting (EPC)

 Main principles

 Project examples

 Facilitators

Agenda

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 €

 CO₂ 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, web-based energy management system, user trainings

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EPC model variations – EPC light in Pankow, Berlin

Elementary School, Kollwitzplatz in Pankow

 Goal: To reduce energy consumption by mid-2012 in

schools and administration buildings through “light” measures

 Number of buildings: 15

 Baseline: 882.714 €/a

 Guaranteed savings: 10.2 % (90.037 €/y)

 ESCO payment: 44.118 €/y

 CO₂-reduction: 3.973 t/a

 Duration of contract: 2 years

 Measures: Energy management, system optimization and

continuous monitoring

Agenda

 Energy Services in general

 Energy Supply Contracting (ESC)

 Energy Performance Contracting (EPC)

23 Customer e.g., • Public institution • Company ESCO e.g., • Energy utility • Engineering company • Energy agency Facilitator e.g., • Energy agency • Consultant Energy supplier e.g., • Energy utility Financing institution e.g., • Bank • Public fund • Private investor

Institutions setting legal framework

e.g., • Parliament • Energy authority Subcontractors, suppliers etc. e.g. • Builders • Suppliers • Insurances

Energy services – Involved stakeholders



Support in building/facility identification and pooling



Baseline elaboration



Tender preparation (incl. Contract) and evaluation



Management of the procurement process



Support in the annual evaluation of savings and assessment of

changes in use



Moderation between client and ESCO

 Regional support to 9 large cities and metropolitan regions to establish EPC

 Integration of EPC in long-lasting energy and climate plans

 EPC task forces

 > 20 pilot projects

 Focus on the demand side

 EPC Best practice database

 Marketing material

 Focus on EPC project facilitation

 Facilitator guidelines (in national language)

 ca. 30 Training events/workshops

 Promotion of EPC, e.g. through Energy Service Award

 Website with useful documents: www.eesi2020.eu

EU funded project: EESI 2020

EBRD Project: Market development of EPC in Romania

 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

Romania: GEF – Opening the Market for Private ESCOs – Project Implementation Support

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www.berliner-e-agentur.de

[email protected]

© Berliner Energieagentur GmbH

Delivery & installation of equipment/parts of equipment Equipment Installation Invoicing of installation  Planning, financing, implementation  Operation

Energy Supply Contracting

Invoicing of energy delivered  System analysis, planning, financing, implementation & operation

 System responsibility for equipment & users’

behaviour  Controlling

Energy Performance Contracting

Invoicing of reduced energy consumption

Energy Services – Typical Models

86%

9%

5%

x% Share in German Market Volume

www.eesi2020.eu

Project acronym:

EESI 2020

www.eesi2020.eu

 SEVEn

The Energy Efficiency Center

Czech Republic

 GEA

Graz Energy Agency

Austria

 NEE

Norwegian Energy Efficiency Inc

Norway

 Codema

City of Dublin Energy Management Agency Ireland

 ELI

European Labour Institute

Bulgaria

 Factor4

Factor4

Belgium

 ICAEN

Catalan Energy Institute

Spain

 REGEA

North-West Croatia Regional Energy Agency Croatia

Co-Ordinator:

BEA Berlin Energy Agency

Germany