1. The LEMON project, using EPC in Social Housing – October 18th 2017
Claudia Carani – AESS Modena

2. AESS
AESS is a no-profit organization created 1999 working to contribute achieving a sustainable development of the Emilia-Romagna region
We have 60 associated public authorities
We are a team of 16 energy experts
We provide mitigation and adaptation services to the private and public sector

3. AESS and EPC experience
Previous experience in EPC tenders:
EPC tenders for Municipalities in Emilia Romagna Region;
ELENA-Modena project, which provided 0,7m€ for technical assistance to Municipalities of the Province of Modena with an European Investment Bank contribution; this led to a total amount of 32 m€ in energy investments on municipal property;
MARTE – MLEI PDA project Assessment of the interventions for the 5 hospitals energy retrofit, integrating ESCOs private investment with structural funds(grant+revolving fund).

4. LEMON project
LEMON is a project funded as part of the European Horizon 2020 program (call-EE : Project development assistance for innovative bankable and aggregated sustainable energy investment schemes and projects) with the purpose of providing technical assistance to public and private entities for the preparation of tenders for the energy retrofitting of 622 social housing units in the provinces of Reggio Emilia and Parma.

5. LEMON project
LEMON will supplement regional and national loans and incentives to improve the energy efficiency of the buildings and apply two new contractual instruments to govern the relations between tenants and owners of the residences, the energy supplier and the ESCOs (Energy Service Companies) so as to ensure a return on investment within 15 years from the retrofitting.

6. LEMON partnership
4 organizations are partners of the LEMON project: Agenzia per l’Energia e lo Sviluppo Sostenibile di Modena (AESS), the project coordinator, ACER Reggio Emilia, ACER Parma and ASTER, the Consortium for the innovation and the technology transfer of the Emilia-Romagna Region.
The Emilia-Romagna region is supervising the projects

7. LEMON objectives
To experiment innovative financing models for social housing retrofit through EPC model contracts, mobilising 15,290 million Euros of investments in energy retrofitting, in order to reduce the buildings energy demand;
To develop and implement energy efficiency projects in 622 private and public dwellings involved in the energy retrofit programme;
To identify the buildings were retrofit intervention can maximise the energy saved, reaching at least an average 40% energy reduction.

8. LEMON objectives
Lead to 5,74 GWh primary energy saved and t CO2 emissions avoided for the social housing sector within the end of the project, in May 2018;
To develop a new lease based on the energy performance of the housing unit, called EPTA - Energy Performance Tenancy Agreement.

9. LEMON activities PHASE 1: Preliminary activities
Energy audits and feasibility studies set up in 622 dwellings involved by the retrofit interventions.
Collaborative workshops where ACERs, research centres, local administrators and companies of the construction sector will exchange good practices and knowledge regarding social housing retrofit.

10. LEMON activities 50% with autonomous boilers and private owners
10% with centralized heating system and private owners
30% with autonomous boilers and ACER tenants
10% with centralized heating system and ACER tenants

11. LEMON activities

12. LEMON activities

13. LEMON activities

14. LEMON activities Business plan Yearly energy costs methan
Yearly energy costs methan
€ ,65
€ ,99
- Total investments
€ ,00
- Grants and national incentive ‘conto termico’
€ ,00
Net investment
€ ,00

15. LEMON activities

16. LEMON activities

17. LEMON activities
PHASE 2: EPC tender development and set up of the financial instruments
City Council Deliberation that approve the LEMON retrofit programme and the energy performance objective, the economic and financing plan of the investment, the tenants scheme, extending the contract with ACER according with the payback period and define how to co-finance it (co-funding or increasing fee)
Buildings board decision from the dwelling owners to co-finance

18. LEMON activities
PHASE 2: EPC tender development and set up of the financial instruments
Lemon project Tender to select the bank and loan subscription
EPC tender for investment, maintenance and monitoring of the energy performance
Call for tender of works in buildings with autonomous boilers
EPTA -Energy Performance Tenancy Agreement

19. Centralized heating system – Mixed ACER tenants and private owners
LEMON activities
Centralized heating system –
Only ACER tenants
Autonomous boilers -
Energy bills addressed to the ESCO
EPC according with D.Lgs.102/2014 (cannot include the energy supply); the ESCO is third responsible and maintain the boilers.
The ESCO obtain the fiscal incentive “Conto Termico”.
Energy bills addressed to the tenants
EPC according with D.Lgs.102/2014 (cannot include the energy supply); the ESCO is not third responsible and cannot maintain the boilers.
Mixed ACER tenants and private owners
Thanks to the majority of ACER dwellings in the buildings the Building Assembly can deliberate on energy efficiency investments
EPC according with D.Lgs.102/2014 (cannot include the energy supply); the ESCO is third responsible and maintain the boilers.
The ESCO obtain the fiscal incentive “Conto Termico”only for the tenants. The owners can obtain the fiscal incentive “55% on tax reduction”
Energy bills addressed to the tenants/owners
According with this situation the ACERs agree on an a EPC tender with energy supply based on D.LGS.102/2014 for the centralized heating system buildings
Monitoring, maintenance and guarantee of the performance in centralized heating system and autonomous boilers
The hypothesis expects 70% of the investment covered by the ACERs and 30% on investments covered by the ESCO.
The ACERs will have a payback period of 10 years, while the ESCO with the will have a payback period of 7 years.

20. LEMON activities
1) Scouting of financing/loan to different financing institutions EEEF, Cassa Depositi e Prestiti, BEI, Local Banks. Many findings:
For local banks the investments fragmentation reduce the risk of the local banks;
For large banks maximum 2 lots;
For the EIB the investment is to low, it is necessary to integrate with other investments;
For Cassa Depositi e Prestiti the bankability of ACERs is very low since they do not own the buildings, they request a bank guarantee;
For EEEF the Municipalities can guarantee the loan, but the administrative barriers can increase the risks. The loan is for years;
The evaluation of the investment bankability requires between 2-4 months.
2) Competitive dialogue tender

21. LEMON activities
PHASE 3: Procurement process The procurement phase is finalised to publish the tender and award and sign the contracts with the ESCos. PHASE 4: Capacity building, evaluation and LEMON monitoring Organization of capacity building events to increase the competence of target groups (tenants, regional and European policy makers) in the relevant fields of the project, such as the EPC tender development and management, the energy dwelling management, the EPTA. Furthermore, this phase aims to evaluate the project quality and monitor the LEMON impacts.

22. Phase 5: Communication and dissemination
Exploitation of the Results
Decision makers in social housing companies and public authorities (region, provinces and municipalities
Energy Service Companies (ESCos), Innovation Companies, Financing institutions
Building tenants
Aims
Capacity building and Information on EPC contract energy saving potential
Information on energy saving, RES and ICT measures
Disseminate the EPTA
Project website
Presentation at regional stakeholders events and training courses
EU short course
National and European brochure
Article in specific media
Network of social housing companies (Housing Europe, Federcasa, CISPEL)
Meetings with key decision makers
Energy Performance Tenancy Agreement
Other actions expected in the dissemination and exploitation plan
Measures and channels
Provide innovation solutions in EPC contract
Informing on the project objectives
Provide feedback on financing products viability
Focus group events
Presentation at stakeholders events
Network of Innovation Community (Climate KIC)
Report on financing products available
Informing on the new contract
Capacity building and information on the measure implemented in the buildings
Dwelling Energy Management Manual for tenants
Training courses on dwellings energy management
Target
Groups
Phase 5: Communication and dissemination

24. LEMON timeline
LEMON lasts 28 months, from February 2016 to May 2018