EESI2020 A project under IEE European Labor Institue THRACE Seminar&Workshop

FOR THE PROJECT - 1 EESI 2020 – „European Initiative for 2020 targets for energy saving ” Main objective: Fo stering the use of Energy Performance Contracting (EPC) in major cities and metropolitan regions across Europe such as Antwerp, Barcelona, Berlin, Dublin, Graz, Prague, Oslo, Sofia or Zagreb. Main activities: To address the non technological barriers and to support the implementation of long-lasting local EPC programs in the targeted large municipalities or metropolitan regions. Within the project team some experienced EPC project facilitators will make the European best practice experiences on how to develop and facilitate an EPC project and program available to new market players. Once trained to professionals, these new facilitators will be multipliers for the EPC concept in their region and secure long-term effects of EESI 2020.

FOR THE PROJECT – 2 - Partners ELI – Bulgaria REGEA – Croatia Codema – Ireland ICAEN – Spain Factor4 – Belgium BEA – Germany SEVEn – Czech Republic NEE – Norway GEA – Austria Senior and junior partners.

FOR THE PROJECT - 3 The implementation of the project will be carried out throughout the following activities: Development of a DB for good EU practices + EPC documents and tools; Training of experts – facilitators assisting the EPC implementation process; Identification of projects, suitable for EPC implementation in the public sector; Development of concrete proposals for the application of EPC model in the partner-countries.

EPC – a definition up to EESI2020 Energy Performance Contracting (EPC) is a proven and cost- efficient instrument for tapping existing energy saving potentials in the buildings sector. An Energy Service Company (ESCO) implements a customized energy service package, consisting of planning, building, operation & maintenance, optimization, fuel purchase, (co-) financing and user behavior change. The contract between ESCO and building owner contains guarantees for cost savings and takes over financial and technical risks of implementation and operation for the entire project duration of typically 5 to 15 years. The EPC service or main parts of it is paid by realized energy cost savings.

A DVANCED EPC IN THE EESI2020 PROJECT The main strategic goal of EESI is the EPC market development in the participating countries. This aim is followed by intensive information and capacity building for local and regional decision makers, provision of helpful model documents, set-up of EPC help-desks and successful implementation of EPC pilot projects, including 6 projects of advanced EPC. The idea of “Advanced EPC” is to develop and promote EPC models including new contract constructions, additional services or specific objectives as quality-based products. This aims to open up EPC to more customers groups by meeting their specific requirements. Accordingly, EESI will contribute to the cross- national establishment of such “Advanced EPC” with the following models:

A DVANCED EPC IN THE EESI2020 PROJECT -2 “EPC plus” – EPC with comprehensive refurbishment: EPC with comprehensive refurbishment extends the service of the ESCO to comprehensive structural measures on the building shell like insulation or window replacement. These services are usually not part of the classical EPC because of too long pay-back periods. The contractual arrangement within EPC plus therefore contains special regulation on financing. Usually the customer has to pay a share of the investment through a grant or by combination of EPC with subsidy programs. The EPC plus model is furthermore extended with specific technical requirements on the building measures together with special regulations on interfaces and warranties. EPC plus is very suitable in buildings with high needs for renovation. The combination of both structural renovation and energetic optimization opens up organizational and technical synergies leading to high energy savings up to 50%.

A DVANCED EPC IN THE EESI2020 PROJECT - 3 Integrated Energy Contracting (IEC)”: The Integrated Energy Contracting Model combines the objectives of reduction of energy demand through the implementation of energy efficiency measures and efficient supply of the remaining useful energy demand. The ESCO will take over implementation and operation of the energy service package at its’ own expenses and responsibility according to the project specific requirements set by the client. In return, the ESCO will get remuneration for the useful energy delivered, depending on the actual consumption. The business model of Integrated Energy Contracting is based upon the standard Energy Supply Contracting (ESC) model and is supplemented by quality assurance instruments for the energy efficiency measures as a substitute for the energy saving guarantee.

A DVANCED EPC IN THE EESI2020 PROJECT - 4 “EPC light” – energy management with guaranteed elements: Within EPC light energy savings are mainly achieved through organizational measures with low or no investments in technical equipment. The ESCO acts as external energy manager taking over the responsibility to operate and optimize the energy related installations (heat boilers, building automation, lighting control). Since pay-back of high investments on hardware is not necessary in EPC light, the contract duration is short (2-3 years). The main feature of EPC to guarantee savings and relate savings with the remuneration of the ESCO is included in the EPC light contract. The EPC light model is very interesting for customers with low capacities or no resources for sustainable energy management. Suitable buildings are all these, where classical EPC is not feasible by reason of small size, no security of utilization for long contract durations or low investment needs. EPC light has proven to be effective as follow-up of a classical EPC contract or following energetic renovation measures undertaken by the customer.

A DVANCED EPC IN THE EESI2020 PROJECT - 5 “ Green EPC” – EPC with special focus on renewable technologies: The classical EPC has proven to be effective as energy saving instrument. The main focus is set on energy costs reduction by energy efficiency measures. Since climate protection is one major concern of policy and motivation to energy saving measures, advanced EPC models with special focus on reduction of green house gas emissions are essential. EESI will try developing standards, models and examples with special focus on the implementation of primary energy savings and/or the technological focus on renewable energy technologies. These models are still under development.

C HANCES WITH EPC As a matter of fact, however, implementation EPC projects means numerous other benefits as well for the potential clients: The building owner / client does not need to use own funds, in this way transferring its own investment risk. Modernization of the plants improves energy efficiency and thus also increases operating reliability and security of supply, while energy costs and environmental pollution are reduced. The ESCO's technical know-how and professional energy management are used. The building owner / client is relieved of essential planning and operating work. More time remains for its own core tasks. Value, productivity and comfort of the building(s) are enhanced. A number of individual areas (planning, financing, construction, operation, maintenance) are covered from one source. This enables a considerable reduction of the number of interfaces. Additional services such as user motivation and training measures can be contractually stipulated. Contract elements assign commercial and technical risks to the ESCO´s to a large extent. In particular, the valuation of the saving guarantee is to be highlighted.

Public buildings suitable for EPC projects in South-West of Bulgaria Annual energy economy 10,4 mln.BGL/year Saved emissions СО2 24,5 kt / year Necessary investments 130 mln.BGL 142 buildings – public property

National status-quo Main problems: Institutional problems limited capacity of the management bodies in the field of the design and execution of policies and programs for EE; Legal barriers – insufficient coordination between laws and ordinances on the EE topics; Low prices of the energy compared to the other EU member-countries; Macro-economic barriers – high interests, limited credit history of the legal persons; Lack of unions of the building owners as a legal body, lack of clear rights of property and utilization during period of EE renovation.

Status-quo-2 Financial barriers – the need of financing for starting. Difficult access to funds. Need of proven guarantees. 6. Supposed a high risk – the BG banks have not the capacity for assessing the benefits of the projects for EE renovation. These benefits are often considered as purely “social” or “ecological”. 7. Law capacity for developing reliable for the banks EE projects – project developers have not both financial and technical capabilities for designing convincing business plan; 8. Information barriers – lack of information on advanced EE technologies, financial efficiency of the EE measures and the new financial instruments and working business models.

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