Local authorities’ perspective EPC uptake in Cities and Regions

Introduction about STEPPING project Step up for energy efficiency 9 Partners coming from 8 regions of 7 EU countries of MED area, committed in testing and transfeering EPC implementation at local level 1.6 M€ of ERDF for delivering: at least 8 Investment Plans involving more than 60 Local Authorities 4 Procurement Tenders for awarding energy efficiency works transferring results into ordinary tender procedures of partners engagement of largest audience with dissemination and training activities

Pilot implementation Case study from Italy - Piemonte 4 Investment Plans drafted, bundling 39 buildings (maily schools, office buildings and gyms) belonging 20 Municipalities 3 tender procedures (public calls) envisaged before October 2019 for an overall investment foreseen of at least 3M€ (leverage factor of about 20) by an EPC with Third Party Financing and PPP Average expected energy savings are above 40% Typical contract duration is 12-15 years.

Pilot implementation Case study from France – Auvergne Rhône Alpes Involvement of 5 municipalities and 1 Gathering of municipalities 5 schools renovation plan drafted 2,2 M€ investments planned with average energy savings >45% Demonstration of the economic interest for local SME’s and market sourcing Extension of the services of a local public society to take the role of a public ESCO

Pilot implementation Case study from Italy – Emilia-Romagna Region 1+1 Investment Plans, bundling 9 + 63 buildings (mainly schools and office buildings) belonging to 3+7 Municipalities 1 tender procedure (public call) launched and awarded for an overall investment of 6.3M€ by an EPC with Energy Service contract. Average expected energy savings: 30% Typical contract duration is 9-15 years.

Pilot implementation Case study from Portugal - AREANATejo Buildings Pictures Pilot implementation Case study from Portugal - AREANATejo Involvement of 11 Municipalities 12 energy monitoring systems implemented (8 sports buidings; 3 cultural buldings; and 1 education building) Investment of more than 700 k€ Reduction of energy consumption with an overall payback of about 4 years

Pilot implementation Case study from Spain – Province of Huelva (Andalusia Region) 1 Investment Plan drafted, bundling 15 buildings (schools) belonging to 11 Municipalities low profibiality of EPC model in the tipology of selected buildings although expected energy savings are above 42% low interest by ESCOS side due to low internal rate of return and lack of public subsidies

Pilot implementation Case study from Slovinia - Upper Carniola Region Preparation of joint EPC investment plan, for 3 buildings belonging to 2 Municipalities Average expected energy savings are about 17% with payback period of about 15 years due to the high prices currently in the market Evaluation of different procurement procedure to implement the invetsments

Lessons learnt Constraints for EPC (MED Public Authority perspective) Legal and general framework EPC is considered risky and time-consuming procedure Lack of public subsidies in some countries hinder the potentialities of EPC Although more attractive to the market, the bundling process is still a very complex one (from a cultural, administrative, management and technical point of view) Level of maturity of the market Lack of knowledge regarding the EPC mechanism by municipal decision-makers and market operators Guaranteed savings are considered a risky business ESCO market not solid enough from financial point of view in most of MED area

Lessons learnt Constraints for EPC (MED Public Authority perspective) Lack of internal capacity in Public Authorities Poor project management capacity Selection of buildings and type of measures is a key aspect in order to create a profitable bundling for the market and ensure acceptable internal rates of return Climate conditions in a mild Mediterranean climate the energy demand for space heating/cooling is sometimes not so significant, thus energy retrofit is not ranked as a priority of a PA

Lessons learnt Recommendations One-stop shop approach, offering Project Development Assistance is crucial to set up interesting investment for the market Standardization (methods, documents and procedures) is needed to contribute to a feasible EPC model for every part involved Work on motivation: “payback” and accountability should not be the only point of discussion. Environmental motivations and the strengthening of the internal market can play a key role; Training (PA and professionals) should be boosted in order to create a potential market and improve the common understanding

Key project outputs https://stepping.interreg-med.eu/ @SteppingMed PROCUREMENT PROCEDURE FOR AWARDING ENERGY EFFICIENCY WORKS EPC SIMULATION TOOL FOR FINANCIAL ASSESSMENT OF BUNDLING PROJECTS MED EPC GUIDELINES (tbd) POLICY RECOMMENDATIONS (tbd) https://stepping.interreg-med.eu/ @SteppingMed silvio.denigris@regione.piemonte.it